What is a monopoly? Concept, types, advantages and disadvantages. Monopoly: definition and types. What is a natural monopoly? What is a monopoly in

Monopoly(from the Greek "mono" - one, "polio" - I sell) - the exclusive right of production, fishing, trade and other activities belonging to one person, a certain group of persons or the state. This means that, by its very nature, monopoly is the exact opposite of free competition.

Monopoly is characterized by:

1. one firm;

2. the uniqueness of products that have no substitutes;

3. almost insurmountable barriers to entry;

4. somewhat limited access to information;

5. regular, sometimes complete price control.

Monopsony- a type of market structure in which there is a monopoly of a single buyer of a particular product. By limiting its purchases, the buyer secures a monopoly profit by losing part of the seller's income.

A monopsonist buyer is interested and has the opportunity to buy goods at the lowest price. This situation is typical for the military industry, whose products are purchased exclusively by the state (this applies primarily to strategic weapons).

However, the state does not always use this advantage. Much more often, the monopsonic advantage is realized in local markets. For example, the only agricultural processing enterprise in the region imposes monopolistically low procurement prices on farmers.

Bilateral monopoly - it is a market structure where a monopolist is opposed by a monopsonist (a single seller faces a single buyer).

This is observed, in particular, when a monopolist firm negotiates with an industry trade union regarding the hiring of workers (purchase and sale of labor). An example is the clash between the air traffic controllers' union and the national aviation company.

A pure monopoly usually arises where there are no real alternatives, no close substitutes, the product being produced is to a certain extent unique. This can be fully attributed to natural monopolies, when an increase in the number of firms in an industry causes an increase in average costs.

A typical example of a natural monopoly is municipal utilities. Under these conditions, the monopolist has real power over the product, controls the price to a certain extent and can influence it by changing the quantity of goods.

Monopoly arises where and when there are high barriers to entry into the industry. This may be due to economies of scale (as in the automotive and steel industries), with a natural monopoly (when any companies - in the field of postal, communications, gas and water supply - consolidate their monopoly position by receiving privileges from the government).

The state creates official barriers by issuing patents and licenses. Patents have played a huge role in the development of companies such as Xerox, Eastman Kodak, International Business Machines (IBM), Sony, etc.

The monopoly position secured by a patent serves as an incentive for investment in R&D and, thus, a factor in strengthening monopoly power. Entry into the industry can also be significantly limited by the issuance of licenses. In the US, over 500 professions are subject to licensing (doctors, taxi drivers, chimney sweeps, and many others). The license can be granted both to a private firm and state organization(a classic example is the history of the vodka monopoly in Russia).

A monopoly may be based on the exclusive right to some resource (for example, natural factors of production). A textbook example is the activities of the De Beers company, which has long monopolized the largest diamond mines in South Africa and therefore controls the world diamond market.

However, at present, tough (up to and including dynamite) actions of monopolies, as well as "unfair competition" in general, are strictly prohibited in developed countries. market economy, although they are found on the periphery of the civilized world.

J. Schumpeter calls a monopoly that provides excess profits through innovative activities effective monopoly . This excess profit for each particular monopoly is a temporary matter. It disappears due to the implementation of other innovations by competitors, rival monopolies. Each monopoly pursues its own private interests, but the result is the benefit of the whole society. According to J. Schumpeter, an effective monopoly is a source of positive economic dynamism. In this respect, his theory is directly opposed to the Marxist concept, which sees monopolies as the cause of economic stagnation and regression.

Types of monopolies:

closed monopoly A monopoly protected by legal prohibitions on competition.

open monopoly- a monopoly in which one firm, at least for a while, becomes sole supplier product, but has no special protection from competition.

natural monopoly. It is possessed by owners and economic organizations that have at their disposal rare and freely non-reproducible elements of production (for example, rare metals, special land plots for vineyards). It also includes entire sectors of infrastructure that are of particular importance and strategic importance for the whole society (railway transport, military-industrial complex etc.). Often the existence of natural monopolies is justified by the fact that they give a huge economic gain from large scale production. Here, goods are created at a lower cost compared to the expenditure of resources that would be in many similar firms.

Legal monopolies formed legally (they are called "protected" from competition). These include the following forms of monopoly organizations:

1. patent system – certifies the authorship of inventions, utility models, industrial designs, etc. and ensures the priority and exclusive right to use them;

3. trademarks - special drawings, names, symbols that allow you to identify (identify) a product, service or company (competitors are prohibited from using registered trademarks).

Artificial monopolies. This conditional name (which separates these organizations from natural monopolies) refers to associations of enterprises created for the sake of obtaining monopolistic benefits. These monopolies deliberately change the structure of the market:

1. create barriers for new firms to enter the industry market;

2. limit outsiders (enterprises that are not included in the monopolistic association) access to sources of raw materials and energy;

3. create a very high (compared to new firms) level of technology;

4. apply larger capital (which gives a greater effect from the growth of the scale of production);

5. "Clog" new firms with well-placed advertising.

Artificial monopolies form a number of specific forms - an artel, a syndicate, a trust and a concern.

Cartel- an alliance of several enterprises of the same industry, in which its participants retain their ownership of the means and products of production, and the created products themselves are sold on the market, agreeing on a quota - the share of each in the total output, on sales prices, distribution of markets, etc.

Syndicate- association of a number of enterprises manufacturing homogeneous products; here the ownership of the material conditions of management is retained by the participants of the association, and finished products is realized as their common property through the office created for this purpose.

Trust- a monopoly in which joint ownership of the means of production and finished products is created by a given group of entrepreneurs.

Concern- an alliance of formally independent enterprises (usually from different industries, trade, transport and banks), within which the main company organizes financial (monetary) control over all participants.

05Jan

Monopoly is the dominance of a business over a specific market for goods or services.

What is MONOPOLY - meaning, definition in simple words.

In simple terms, a monopoly is when a company producing something has no competitors in the market. In this way, this company can directly affect prices and quality, without taking into account the opinion of consumers.

Why does a monopoly arise?

Monopolies can arise both naturally and as a result of questionable and potentially illegal business practices.

The formation of a natural monopoly leads to the absence of healthy competition in a particular market sector. Also, this can happen in cases where the company has a patent for an exclusive product that has no analogues. An example is the Pfizer company, which for a long time had a patent for the production of Viagra ( analogues of which, for a long time, did not exist).

An "unnatural" monopoly emerges as a clearly planned and motivated phenomenon. This is due to pressure on market players with the help of various factors, both legal and not so.

The government may monopolize certain areas of the economy, such as energy, resource extraction, or the provision of utilities. This provides more global control over citizens and pricing policy in the country.

Private structures do not hesitate to use dirty methods of struggle to eliminate competitors in the market. It goes:

• industrial espionage;
• bases;
• influence through state structures:
• raider captures and so on.

The impact of monopoly on the market.

It should be understood that in a healthy market system there are a number of sellers and buyers. This means the presence of competition in the market, which allows prices to change depending on supply and demand. In addition, almost every product has a substitute. If one product becomes too expensive or of lesser quality, there is always the option to purchase a better one.

Imagine that a certain enterprise is engaged in the production of unique products, which others have no analogues. It is the unique product that creates the status of a monopoly for an enterprise, since it has no competitors. Let us conclude that monopoly is a business, which is completely controls the release of a unique product and its price, as well as has no competitors due to the fact that others do not release this product.

Benefits of Monopoly

One of the most important benefits is market control. If in an oligopoly they look up to the price leader, then there is no need to look up to anyone - you produce products and set the price yourself. But setting it too high is unnecessary - as people will start looking for similar products with a low price. Moreover, it follows antimonopoly service, which controls the activities of monopolists. Therefore, not everything is so simple - monopolies cannot set a high price or set conditions for others, they must comply with antitrust laws.

Disadvantages of Monopoly

Probably control. FAS is already a disadvantage for a monopoly, but compliance with the law is necessary. If you approach from the other side, then the disadvantage of a monopoly may just be lack of competition, because if they are available, enterprises are trying to improve their product, thereby the process of development is underway. If there is no one to fight with, then why change something. Do not assume that a unique product will not change over time - it will happen more slowly.

How to enter the monopoly market

This very difficult. Usually monopolists are largest enterprises , they not only control the market, they can also easily crush competitors, especially newcomers. And small firms simply lack the power that a monopolist has. It is unprofitable to have competitors, so it will not be difficult for a large company to crush a small enterprise. There are many ways to do this, but that's another topic.

Does a monopoly exist? Monopoly examples

Natural monopoly is rare in life. Usually it's infrastructure. Here are the monopolies, the railway (RZD). In fact, they are a monopolist in this area, since there are no other companies. Because of this, the quality of service does not improve. As trains ran 50 years ago, so they do now. And modern ones are very expensive and travel only through Moscow and St. Petersburg.

The influence of the monopoly on the economy of the country at all times of its existence was enormous. The impact could be both positive and negative. Given the imperfection of certain provisions of the legislation relating to the sphere of management, the study of monopolies is always very relevant.

Definition

Monopolies in the economy are large companies that control the production and sale of one or more types of goods. Their presence eliminates the possibility of competition. The conditions of monopoly in the economy close access to other enterprises.

Causes

Why does a monopoly appear? In the spheres of the economy, there are various factors that determine the emergence of such enterprises. The main reasons include:

Classification

There are several forms in which a monopoly can exist in an economy. This:

The role of monopoly in the Russian economy

Enterprises of this type perform the most important functions in the Russian Federation. The role of the monopoly in the Russian economy is manifested in the fact that the competitiveness of the country in the international arena largely depends on the state of the company. In addition, the internal security of the state with manufactured goods is of no small importance. The latter is due to the fact that the products produced are consumed by the whole society. Large monopoly enterprises carry out energy, gas, water supply, provide transport, including by rail, air services, provide communication systems, communications. All these products are consumed by the population. One of the main features that distinguishes any monopoly in the economy is the establishment of a high entry barrier to the industry of specialization. In the presence of a single producer, the effect of the volume of production of which is huge, the amount of capital is formed, which will make other enterprises competitive. In a society, as a rule, there are no opportunities to withstand more than one such company.

Federal Law No. 147

This Law provides a list of industries, in each of which one monopoly enterprise can operate. These include:

According to this list, the enormous role of monopoly in the economy becomes clear. These sectors affect the most important aspects of the life support of the population. The essence of a monopoly in the economy is the continuous supply of essential products, keeping prices at an optimal level. Among the most well-known companies operating in the Russian Federation in this direction, it should be noted such JSCs as:

1. Gazprom.
2. "RUSSIAN RAILWAYS".
3. "Transneft".
4. FGC UES.

Specificity

A monopoly in economics is a company in which:

1. Activities to a greater extent involve the provision of services designed for a wide range of users (consumers).
2. Large sums of money are involved in financing.

Undoubtedly, the activities of such enterprises should be regulated by the state. First of all, certain limits on the formation of prices for services are established at the legislative level. Tariffication should be carried out in such a way that the manufactured product is available to all consumers. In addition, for such enterprises, as well as for others, an obligation has been established to make tax deductions to the budget.

pros

The monopoly company is able to:

• Make the most of economies of scale own production. This helps to reduce the cost per unit of output.
• To mobilize significant financial resources to maintain the production line at an optimal level.
• Use the achievements of the NTP.
• Follow uniform standards for the services provided and products manufactured.
• Replace with an intra-company hierarchical structure, a system of contractual relations. This contributes to a significant reduction in losses associated with uncertainty and risk.

Minuses

The negative aspects of the activities of monopolists are manifested in their ability to:

conclusions

As can be seen from the above lists, the advantages of monopoly enterprises can become disadvantages, as well as vice versa. This allows us to conclude that this form of management is highly controversial. It is extremely problematic to determine unambiguously what outweighs, minuses or pluses. Meanwhile, the population cannot live long in uncertainty and dependence on a monopoly. The current system is incapable of either weakening, let alone overcoming, the negative role of the monopoly in the economy. Despite this, such enterprises today act as the main generators of investments.

State regulation

It can be done in different ways. In particular, there is price regulation, which includes methods:

1. Average costs.
2. Setting price limits. This method determines which users are subject to mandatory maintenance. For them, a minimum level of security is established in case it is impossible to satisfy the needs in full.
3. Subsidizing. This method is called the method It assumes that some consumers are provided with products at reduced prices at the expense of other users.

There is also a non-price state regulation. This:

Tariff Freeze

This measure was taken at the government level in 2013. At the same time, in the first year of the resolution, tariffs did not increase, and in the next 2 years, indexation was carried out according to the inflation rate of the previous period. Meanwhile, the monopolists said that they would be forced to cut investment programs. This, in turn, will negatively affect the state of a number of industries. In addition, at the beginning of the introduction of such a measure, enterprises indicated the likelihood of structural adjustments. So, it was about the reduction of personnel (in the administrative apparatus), the rejection (except for production employees). According to Gazprom's calculations, in 2013, if tariffs are frozen over the next 3 years, the company may lose 510 billion rubles of income. At the same time, according to forecasts, it should decrease by 407 billion rubles.

capital that controls a significant part of the production and marketing of products, receiving a monopoly high (above average) profit on a sustainable basis.

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Monopoly

from the Greek monos - one, poteo - sell) - the exclusive right granted to the state, enterprise, organization or to an individual to carry out any activity; dominance in the market of goods and services by one producer or seller or a small group of sellers united in order to capture the market, oust competitors, and establish price control (see Concentration of production, Centralization of capital). M. concentrates in its hands a significant part of the production and marketing of goods and services, which allows it to establish a dominant position in the market and dictate terms to the consumer, up to the establishment of a monopoly price, which is the basis of monopoly profit. M. is characterized by the fact that the entry into the industry of new manufacturers is excluded due to insurmountable barriers (patent M., M. for sources of raw materials, etc.); the price is determined solely by the monopolist; relations between M. and outsiders develop as relations of strong and weak (ie, the monopolist dictates the conditions for concluding contracts). M. - large, highly concentrated, centralized production. Usually M. are large companies (firms, corporations) or their associations (cartels, trusts, concerns, consortiums, conglomerates) (see Cartel, Trust, Concern, Consortium, Conglomerate). The monopoly firm has complete control over production and the market. Pure M. is quite rare in life, mainly due to the operation of antitrust laws designed to ensure competitive conditions in the market (see Antitrust Law). It is obvious that such formations as technological M., state natural M. and those monopolistic structures that are based on the advantages associated with leadership in scientific and technological progress do not contradict the structure of the modern market economy and are fully compatible with it. But even areas of natural monopoly are by no means permanent. The monopoly regime is gradually losing its former advantages, which confirms the need for antimonopoly policy. The main negative consequences of the monopolization of the economy are: irrational distribution of resources; slowdown in scientific and technological progress; income inequality; threat to political democracy.

Great Definition

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