Perfect competition is “a market structure where competition is at its greatest possible level” (The Economic Times, 2016). In this market, entry and exit is very easy and also free as there are many firms, both sellers and buyers who all produce homogenous items. Firms are price takers because they cannot control the price of their products, as they are determined by the interaction of demand and supply in the entire market. Another characteristic in this market is that the producers and the consumers have total awareness of products including prices as well as the costs of the market, quantity and availability (Sloman, Hinde and Garratt, 2013), hence the mobility of the factors of production is perfect in the long run in this market. Being price takers, to achieve the aim of profit maximisation, firms produce a level of output where price equals marginal cost (MC) of producing an extra unit of product. Profit is maximised where marginal revenue (MR) is equal to MC because price is also the MR for competitive firms. Monopoly is the opposite of perfect competition due to a single firm owns and serves the entire market because there is no competition available. There is “only one provider of a good or service, great barriers to entry for seller, no barriers to entry for buyer” (Econ Guru, 2006). This often then leads to high prices and mediocre products being sold, however very unique. Monopolies are price makers because they control the market and their prices are set higher than MC where it is equal to MR in order to achieve commercial profits. Economies of scale is also a source for a monopoly firm as they have more efficient cost of production than larger firms hence a natural monopoly can arise like gas and electricity companies in the UK. Governments however try to control the actions of monopolies such as imposing price controls to protect groups that