Monopoly category
Franchise
Some exclusive franchise privileges are stipulated and protected by law, and patent rights and copyrights are monopolies permitted by law. In order to encourage invention, most countries have patent laws, which shows that patent monopoly is caused by legal barriers. In some cases, the government grants exclusive rights to manufacturers; Sometimes the government grants the privilege of exclusive operation by bidding for contracts after competition.
Natural monopoly
If a product needs a lot of fixed equipment investment, and mass production can greatly reduce the cost, then a large manufacturer may become the only manufacturer in the industry. When a large manufacturer supplies all the market demand, the average cost is the lowest, and it is difficult for two or more manufacturers to make a profit in this market. In this case, the manufacturer has formed a natural monopoly.
Strategic monopoly
If no one has certain production technology or know-how except monopolists, the market will naturally form a technological monopoly. In the absence of technical barriers and legal barriers, manufacturers build barriers to establish or consolidate their monopoly position, which is strategic monopoly.
Other monopoly barriers
The above obstacles are not exhaustive, nor are they necessarily mutually exclusive. If the manufacturer controls the supply of a certain raw material. Any barrier that prevents competitors from entering the market is the cause of monopoly.
cause
In the development of capitalist economy, free competition leads to concentrated production, and when it reaches a certain stage, it will inevitably lead to monopoly. When monopoly replaces free competition and occupies a dominant position in economic life, capitalism develops to the stage of imperialism, that is, monopoly capitalism.
There are three main reasons for the formation of monopoly:
Natural monopoly: the cost of production makes one producer more efficient than a large number of producers. This is the most common form of monopoly.
Resource monopoly: key resources are owned by one enterprise (such as the dubbing industry of wireless TV).
Administrative monopoly: The government gives enterprises the exclusive right to produce a certain product or service.
There is also a monopoly by the government itself, which is called monopoly.