Introduction
This course work examines the topic “Patterns of monopolization of the economy. Antimonopoly policy". The relevance of this topic is that monopolists act according to certain rules and laws, as a result of which it is possible to deduce the pattern of development of monopolies and prevent the development of monopolization of markets.
Monopolists limit production and set higher prices due to their monopoly position in the market, thereby reducing the standard of living of the population, and antimonopoly legislation cannot always stop attempts to monopolize the market.
A perfectly competitive market has a beneficial effect on the country's economy. The price of goods is determined by market rules of supply and demand, while companies cannot influence the price, thereby accepting it as given.
The purpose of my work is to outline in as much detail as possible the essence and forms of such a phenomenon as monopolization, both negative and positive features, to show the monopolization of Russian markets using a real example, to characterize the antimonopoly policy of the Russian Federation, and also to identify the main problems of antimonopoly regulation in our country and justify your own opinion on this issue.
monopolization antitrust policy
Monopolization
The essence of monopolization, goals and mechanisms of functioning
To understand what monopolization of the economy is, let’s consider who monopolists are and what a monopoly is.
Monopoly (from the Greek monopolium - one sell or the only seller) means the exclusive right to carry out any activity (production, trade, fishing), owned by one person, group of persons, organization or state, allowing one to impose one’s own interests and receive monopoly profits .
Monopolists have lower costs and, selling their products at market prices, receive from such sales not the usual average profit, but excess profit. And their rate of profit is consistently higher than the average market rate of return. This fact reflects their real market dominance.
Monopoly as a type of market structure has the following features:
There is only one company on the market and many buyers of its products;
There are no products that can serve as competitors to those offered by this company;
Full control of the monopolist over the price of goods and sales volume;
The presence of certain barriers to entry of other companies into the market.
The essence of a monopoly is characterized by the following points:
1. Monopoly arises from dominance in production;
2. By dominating production, the monopoly dominates the market;
3. Thanks to monopoly prices, the monopoly receives monopoly high profits.
Monopolization is when a small number of producers control a large part of the market for a particular product, and therefore have the ability to exert some influence on the price of the product.
Certain forms and signs of monopolism are observed even in those economic systems where monopolies do not occupy a dominant position. Let's look at the signs of creating a monopoly. With the advent of new technical inventions, new industries arise, and there is a rapid development of production, mainly in light industry. Changes in the technological method of production lead to the concentration of production, along with which the process of concentration of capital developed intensively.
Concentration of production expresses the internally necessary, stable and essential connections between the development of productive forces and the process of concentration, as a result of which there is a growing concentration of factors of production (material and personal) in large enterprises. The action of this law manifests itself with varying degrees of intensity at all stages of the development of capitalism, the driving force of which is competitive struggle. In order to survive in this struggle and make greater profits, entrepreneurs are forced to introduce new technology and expand the scale of production. At the same time, from the mass of small and medium-sized enterprises, several larger ones are gradually emerging. Sooner or later, competitors face an alternative: either continue the exhausting struggle among themselves, or reach agreement on the scale of production, product prices, sales markets, etc. As a rule, they choose the second path, concluding open and unspoken agreements among themselves, which is one of the most characteristic features of a monopolized economy. Thus, the emergence of monopolistic enterprises is a natural result of the development of productive forces, the evolution of the market, and the operation of the laws of competition.
Monopolies arise not only as a result of the concentration of production and capital, but also on the basis of their centralization. Centralization of production is an increase in the scale of production as a result of the merger of several separate enterprises into one with the establishment of a single management. Centralization of capital is an increase in the size of capital due to the combination or merger of previously independent capitals. A typical example of such an association is joint stock companies. Today, in developed countries of the world, almost all large, the vast majority of medium-sized and even some small enterprises exist in the form of joint-stock companies. True, shares of small and medium-sized companies, as a rule, are sold not on the securities market, but on the over-the-counter market. Such companies are closed joint stock companies.
The functions of a monopoly are determined by their qualitative and quantitative characteristics, organizational forms, the nature of relations with outsider competitors, market conditions, the relationship between supply and demand, the needs and interests of sellers and buyers, the availability of resources and government economic policy. The functions of monopolies are influenced by the amount of capital, the scientific and technical potential of the company, the state of the market infrastructure, access to information, competition and public opinion.
The most important function of monopolization is regulation of one’s own business activity and strategy, choice of development priorities, control over resources and products that compete with one’s own.
To quantitatively characterize monopoly power, the following are used:
1) Lerner’s indicator of monopoly power L = (P-MC)/P, which shows the degree to which the price of a product exceeds the marginal cost of its production.0 2) index of monopoly power (M), which shows the degree to which prices exceed long-term average costs (LAC): M = (P-LAC)/P; 3) Herfindahl-Fishman index, which determines the degree of market concentration: H = P21 + P22 + ... + P2n, where H is the concentration indicator, Pn is the firm’s percentage share in the market or share in the industry supply. The maximum value of H = 10000. If H is less than 1000, then the market is considered unconcentrated. Such a market requires at least 10 companies, the share of the largest is 31%, the two largest - no more than 44%, three - 54%, four - no more than 63%. If H is 1800, then the industry is considered highly monopolized. Sources or factors of monopoly power: 1. The company's share in market supply; 2. The absence of analogues of goods produced by a company with monopoly power; 3. Elasticity of market demand. The lower the elasticity of demand for a firm's product, the greater the monopoly power of that firm in the market. Hello, dear readers of the blog site. Monopoly is an economic situation in the market when the entire industry controls the only one manufacturer (or seller). The production and trade of goods or the provision of services belongs to one firm, which is also called a monopoly or monopolist. The subject has no competitors, as a result the company has a certain power and can dictate terms to customers. The word “monopoly” originated in Ancient Greece and translated means “I sell one.” The definition of monopoly implies the existence of a business niche where one manufacturer dominates, which regulates the quantity of goods and their prices. Pure monopoly companies are very rare. This is due to the fact that for almost any product or service a substitute can be found. For example, the natural monopoly is the metro. If the subway infrastructure is divided between two or three competing firms, real chaos will begin. But when the metro services are no longer suitable for the population, people will be able to get to their destinations by buses, trams, cars, and trains. That is, the metro is a monopolist among underground, high-speed transport, but in the field of passenger transportation it is not such. The state of the economy in which one subject dominates, typical for housing and communal services, the public sector, and production of products that require careful control. When considering what a monopoly is, one cannot ignore another related concept - “oligopoly”. This condition is much more common in economics. Oligopoly market divided between several companies. With the collusion of the main players, the market’s characteristics approach a monopoly (for example, mobile operators). Classic - aircraft and shipbuilding, weapons production. Here it happens between two or three suppliers. The following forms of monopolies are distinguished: There are other classification options, for example, they are divided into two types by type of ownership: Or according to territorial based on 4 types: If we consider an artificial monopoly, when a number of enterprises (companies) unite, then they say about various forms of such mergers: People noticed the benefits of monopoly almost immediately with the advent of exchange and the emergence of market relations. In the absence of competition, product prices can be raised. Ancient Greek philosopher Aristotle believed in the creation of a monopoly and farming. In one of his works, as an example, the sage talks about a subject who received money “at interest.” To make a profit, an enterprising man bought up all the iron in the workshops, and then resold it at a premium to merchants who arrived from other places. The thinker also mentions attempts by the state to regulate the monopoly. The cunning seller was expelled from Sicily by the government. In European countries in the Middle Ages, monopolism developed in two directions - as a result of the creation of guilds and through the issuance of royal privileges: In the 19th century, as a result of the rapid development of production, competition between manufacturers intensified. Cost reductions have led to the consolidation of factories and plants. Remaining players united into various communities( , pools), which acted as monopolists. Monopolies in the history of Russia are a repetition of global trends. But most of the processes in our country took place late and were often brought from outside. Thus, in Tsarist Russia, the production of alcoholic beverages was exclusively a state function. And the first industrial syndicate arose in St. Petersburg in 1886 with the participation of German partners. He united 6 companies producing nails and wire. Later, a sugar syndicate was born, then Prodamet, Produgol, Krovlya, Med, Prodvagon, etc. The desire to monopolize the market is normal for any business. It is inherent in the very nature of entrepreneurial activity, the main goal of which is to obtain maximum profit. Monopolies are created both naturally and artificially. Additional factors, contributing to the development of monopolism, can be: Lack of competition leads to negative consequences in society: Therefore, governments are trying limit the emergence of monopolies. Special government bodies monitor the level of competition in the market, control prices, and prevent small firms from becoming dependent on large players. Antitrust laws exist in most countries of the world. It protects the interests of consumers and promotes economic prosperity. Good luck to you! See you soon on the pages of the blog site You might be interested What is a syndicate What is competition - its functions, types (perfect, imperfect, monopolistic) and the law on the protection of competition What is stagnation in simple terms Oligopoly: what it is, its signs and properties What is a concern What is a cartel Conjuncture is a multifaceted term with a market focus What is a conglomerate Affiliates - who are they in simple words? What is a market - what are its functions in the economy and what types of markets are distinguished Marketing is the engine of trade The market economy, with its mechanisms for regulating free competition and entrepreneurship, has largely contributed to the formation of the picture of the world that we have today. The advantages of this type of system are undeniable, but this was not always the case. Moreover, some sectors of the economy of different countries still have a monopolistic basis. This is the only possible option for their effective functioning. So what is a monopoly? What is its essence? A monopoly is a market situation when an industry is dominated by a large enterprise or their association engaged in the production and sale of unique products. Such an economic entity is protected from competition. He is the only representative of the market producing a certain product. Since a monopolistic enterprise is in privileged conditions of existence and is the only source of supply, there is no need to fear for the size of demand. This gives him the opportunity to independently set prices and plan production processes according to qualitative and quantitative characteristics. Thus, monopolization is the capture of the entire market or a larger share of it by one large company. In modern legislation, such activity is defined as an economic entity’s abuse of its position against the economy and existing laws. Among them are the following: Reasons for the emergence of monopolies: Monopolization is a multifaceted, complex phenomenon; therefore, many types of it are distinguished depending on what is taken as a basis. The most common criteria for classification are the following. According to the form of ownership, the types of monopolies are: By nature and cause of occurrence: By level of government regulation: By territorial nature: local, regional, national and transnational. Types of monopolies are a whole section in economic theory. Due to versatility, there is also a division by form. Let's consider their varieties. The simplest is a cartel, since economic independence is retained by each of the participants. The main point is to exchange information and conclude an agreement regarding prices and division of sales markets. A syndicate is an association of several companies from the same industry, as a result of which each of them retains control over its own production facilities, but commercial activities are carried out by agreement of the parties. As a rule, to simplify functioning, a common sales department is created. A trust is an association of several companies representing one or more sectors of the economy. There is a merger of production, sales and financial management. In accordance with the percentage contribution of each organization to the common cause, shares and, subsequently, profits are distributed. The concern is an association of companies from different industries based on diversification. The legal independence of the participants is preserved, while a single financial center is created. This increases the potential for production development. Conglomerate is a merger or acquisition of diversified companies for the purpose of unified financial control. Enterprises may be located in completely unrelated industries. The main purpose of this is diversification. It depends on the predominance of one type of relationship or another in the economy. In order to assess the level of monopolization and competition, the following are distinguished: One of them is the number of manufacturers producing a particular product, and their division into groups depending on size and specialization. To assess the level of monopolization, they also look at the volume of market share by manufacturer. Other indicators: Positive aspects: there are a number of sectors of the economy where competition is unacceptable. The presence of a monopoly in these areas contributes to the rational distribution of resources and savings due to the factor of mass production and cost reduction. Control over natural resources, high-tech and military developments, public services, and enterprises with a unique focus absolutely cannot be given into private hands. The most effective way would be to manage one company. The main negative consequences of monopolization are associated with the lack of competition. This leads to a long list of negative factors affecting the development of the country’s economy. The state tirelessly monitors the state of the market. It maintains a balance between competition and monopolization. Otherwise, excessive growth in the number of dominant companies may worsen the functioning of the entire industry. Like any other component of the economy, the activities of monopolies are under the control of a specialized government body. Thus, competition and monopolization are two radically different concepts that counterbalance each other. However, both have a dual characteristic, which implies that these market structures have both positive and negative sides. Competition is necessary for the progressive development of all sectors of the economy. However, as the practice of most states shows, it is also impossible to do without monopolistic structures. Monopolization is an economically justified phenomenon in certain market sectors. But without its regulation, a negative impact on the development of the industry is possible. That is why antimonopoly legislation was developed, which allows you to keep the situation under control and maintain a balance between these two types of economic relations. Monopoly is a state of the economy in which a certain business niche is dominated by a single entity that determines prices and quantity of a product. The model is considered the least effective for the consumer, since the lack of competition causes stagnation and shortages. Monopoly is a natural or artificial state of the market in which the means of production for one or more goods (services) are entirely in the possession of one player. A state, a private company, or an international organization can act as a monopolist. The exclusive right to extract a resource and process it, supply goods or provide services can lead to both the protection of consumer rights and their violations. In economics, the Herfindahl Index is used to assess the real state of affairs in the country and the world. This indicator demonstrates the degree of concentration of a particular market in the hands of its specific players: the conditional value of HHI is calculated as the squared sum of the percentage of revenue from the total “pie” of each participant. Pure monopoly, 1 participant: HHI = 100 2 =10000 2 players: HHI = 50 2 + 50 2 = 5000 10 players: HHI = 10 2 x 10 = 1000 Monopoly - what is it, what is the danger of the phenomenon? The desire to capture the market and extract maximum profit is natural for business. The first formations of this type arose in ancient times, when the rulers of cities and lands concentrated the production of certain goods in their hands. In Tsarist Russia, the right to produce alcoholic beverages belonged exclusively to the state (read: its leader). And China had an exclusive technology for creating silks and porcelain - no one could offer analogues. At the moment, nothing has changed significantly: monopolies are either created artificially or formed naturally. At the same time, excessive concentration of markets in the hands of one participant is recognized as unfair competition. In reality, influencing the state of the economy is not easy, since changes require significant funds. Oligopoly is a market condition in which a limited number of participants have the right to extract a resource, process it, produce a product or provide a service. A classic example is the production of passenger aircraft and spaceships, where competition is between two or three companies. Monopoly: what is it in simple words? This is the desire of a group of people to completely take over the distribution channel, to “sit on the pipe.” At all times, opponents of excessive market concentration have expressed arguments in favor of developing competition. The more companies fight for their share of the business pie, the better it is for the consumer. 15 years ago, when cell phones were produced exclusively by high-tech giants, only the wealthiest consumers could afford them. Over the years, offers from hundreds of small companies have slowly but surely brought down the price of devices, while the level of gadgets has skyrocketed. Monopolization of industries ensures a decrease in technical progress - the manufacturer has nothing to strive for. This could be fully felt by the residents of the USSR, where there were only a few large automobile plants, and the queues for cars were scheduled for years in advance. As a result, Avtovaz produced the same vehicle models for decades, and global progress moved forward, leaving the entire industry behind. This exposes another unpleasant part of the process - a severe shortage of goods and services. It can arise artificially or accidentally (due to poor calculation) in a way. In the absence of competition, the manufacturer himself decides how much goods he will “throw away” for sale. And an oversaturation of demand will mean a decrease in profits for such a giant. The list of sectors of the economy in which the concentration of a large share of profit in the hands of one participant is allowed is listed in Federal Law No. 147 of 08/17/1995 - “On Natural...”. In these areas, strict government regulation is carried out through the establishment of maximum prices. The lack of competition has a negative impact on industries: this can be seen in the example of the Russian Railways corporation. All other manifestations of monopolism are persecuted by government agencies and are not acceptable. Antimonopoly authorities monitor the degree of market concentration in the hands of one player or another, and collusion between large producers of goods or service providers. Over the 6 months of 2016, the antimonopoly services of the Voronezh region alone held violators accountable for 12 violations of the law (we are talking about using the dominant position of housing and communal services, energy companies), the total amount of fines amounted to 180 million rubles. A well-known fun for children and adults will help you experience all the delights of such an economic model. A tactical game where participants “buy businesses,” upgrade them, and charge a fee for passage through their territory clearly demonstrates the danger of market monopolization. The most intelligent, prudent and successful businessman in the end remains in splendid isolation, having crushed the entire game board under himself.Examples of monopolies
Types and forms of monopolies
Monopoly in the history of social development
Reasons for monopoly
Antimonopoly legislation
Expanding the concept
Characteristics of a monopolized market
Types of barriers to entry into a monopolistic market
Classification
For example, the management of natural resources such as oil and gas is carried out exclusively by the state.Forms of monopolies
Assessing the degree of market monopolization
Monopolization indicators
Consequence of monopolization
Regulation of monopolies
Its main goals are:The emergence and development of monopolism
Types of monopolies:
Oligopoly
Advantages of monopolies:
Criticism of monopoly
Monopolization of markets in Russia
The main monopoly industries in the Russian Federation:
Monopoly game