Monopoly, as an economic phenomenon, is more obvious in the developed stage of capitalist society. Monopoly is the inevitable result of the development of competition, and its appearance inhibits competition. Lenin once pointed out that when concentration develops to a certain stage, it can be said that it naturally moves towards monopoly. Because dozens of large enterprises can easily reach an agreement with each other; On the other hand, it is the huge scale of enterprises that causes the difficulty of competition and the trend of 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.
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.
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.