In the economy there is quite a largethe number of different processes that affect its development and course. One of them is monopolization. This phenomenon has both positive and negative features, and must necessarily be monitored and regulated in order to avoid significant negative consequences. So what is monopolization, what is its essence and what is the impact?
Definition of concept
To understand the question "what ismonopolization ", it is necessary to understand that the market of perfect competition is characterized by the homogeneity of the products offered, a large number of manufacturers, freedom of trade and information. This situation is theoretically ideal and is taken as a model, but in reality it does not occur. Its opposite is the establishment of a monopoly. The market (or its separate direction) is occupied by one or several large companies that establish pricing policies, regulate production volumes, etc. This is the process of m Onopolisation. It covers, as a rule, one branch of the economy. For example, in the post-Soviet countries there is almost everywhere a monopoly in the housing and communal services.The monopolization of the sector in this case is characterized by the fact that only one company provides services to the population and enterprises. gas - the second, water - the third, and so on. The consumer has no choice of supplier, there is no price competition, etc.
Negative Facts
The problems of market monopolization directly follow from the definition of the concept itself. These include the following:
- Low level or complete lack of competition hinders the development process, significantly reduces the need to improve and modernize products.
- The monopolist can independently set the price for their goods, regardless of the consumer's capabilities, which upsets the price equilibrium.
- Difficult to enter the market of new enterprises with similar products.
Positive sides
What is monopolization in terms of impact on the economy? This is not to say that this process has an extremely negative impact, since there are several arguments in its favor. For example:
- Large producer (or associationseveral) has a sufficiently broad financial and technical capacity to conduct research, develop and introduce new technologies to reduce production costs.
- Monopolistic companies, due to their scale, are more resistant to market fluctuations of the industry or the entire market, financial and economic crises, etc.
Effects
In the presence of monopolization usually occurnet loss of society. This is expressed in the fact that producers can almost infinitely raise prices for goods and services regardless of changes in costs, and the consumer is forced to purchase them on the established conditions. Since the income of the buyer does not increase, the volume of purchased products decreases, which means that the level of productivity of the entire industry falls. Despite the fact that the monopolist receives unreasonably high profits, the whole society loses from this process. In addition, the consequences flow from the negative aspects listed above.
How to recognize?
What is monopolization from a practical point of view?view? In different countries and industries, the value for which they determine the level of competition differs significantly. It is theoretically considered that if a third of the industry is occupied by products of one manufacturer, half are three companies (manufacturers or service providers), and five cover more than 60%, then there is a low level of competition. A monopolized market is recognized if the total number of enterprises is no more than ten. The Harfindel-Hirschman index is usually used for the calculation, based on the total number of firms and their shares in the industry in percentage terms. The task of determining the level of monopolization and the degree of competition usually falls on the state, since this process significantly affects the economy and development not only of a particular industry, but of the country as a whole, and also as a result of the living standards of the population.
State intervention
The presence and level of monopolization in the economyThe country is regulated at the legislative level. Economic measures used to maintain competition, prevent monopoly and its negative impact include:
- Support, finance or provide benefits to manufacturers of substitute products, scarce products, etc.
- Attracting investment in monopolized industries, including foreign ones, as well as assistance in their entry into the market
- Initiation and financing of research activities aimed at developing an industry with a low level of competition.
Administrative government measures include:
- Control of the creation, merger, acquisition, etc. of manufacturing companies.
- Forced demonopolization (separation, crushing).
- Penalties, administrative and criminal liability for attempts to monopolize the industry.
The most complex and sophisticated system of struggleconsidered to be implemented in the USA. However, in recent years Russia has also come to grips with addressing the issue of monopolizing markets, including the adoption of the Competition Law, and also creating a special committee to work in this direction.
