Advantages of completely monopolizing the market:
1. Completely monopolizing the market has the possibility of promoting resource efficiency. To form a completely monopolized market, we must own and invest a lot of fixed assets and funds. As long as we give full play to the utility of a large number of invested fixed assets and funds, enterprises will be able to carry out large-scale production, on the one hand, increase product output, increase product varieties and provide all materials. At this time, the output is higher than that of perfectly competitive enterprises; On the other hand, reduce resource consumption and minimize product costs. At this time, the cost of the product is lower than that of the product under perfect competition. On the other hand, efficient production equipment and advanced production technology are adopted (because only in this way can the output be increased and the cost be reduced), thus promoting the improvement of resource efficiency. Considering the economy of mass production completely, this possibility exists. At the same time, in the early days of the formation of monopoly enterprises, the resource efficiency and economic efficiency of enterprises were improved through scale production.
2. Completely monopolizing the market can stimulate innovation. Innovation refers to the first use of some new knowledge in the production process to develop a new product, a new service or a new processing technology. The type of completely monopolized market is closely related to innovation. Patents are one of the reasons for monopoly. As long as a new product, new service or new processing technology is created and patented, it will form a monopoly on this product, service or processing technology; At the same time, only through patent protection and granting innovators monopoly rights can innovation be promoted. This is because the completely monopolized market gives innovators exclusive rights through patents, so that innovators can enjoy the economic benefits brought by innovation in a certain period of time. Therefore, it will stimulate more enterprises to carry out innovation activities, and at the same time, it will also stimulate monopolists to continue to invest heavily in scientific research and development, thus promoting innovation activities in a wider scope and at a higher level, thus promoting social development.
Disadvantages of completely monopolizing the market:
1. Completely monopolizing the market will cause the loss of market competition. Goods, services or resources that completely monopolize the market are provided by one supplier, that is, they are completely monopolized by one enterprise. In this market type, due to legal and natural restrictions, new enterprises cannot enter the market, thus completely eliminating market competition. Market competition is the driving force of market development and technological progress, which is related to the survival fate and development prospects of enterprises. Therefore, market competition will force enterprises to continuously improve production technology, improve labor productivity and reduce individual labor consumption, thus promoting the rapid development of the whole social technology. After the complete monopoly market excludes market competition, monopoly enterprises can obtain high monopoly income without the pressure of market competition, because the purpose of monopoly enterprises is to maximize profits. When improving production technology can promote the realization of profit maximization goal, we will improve production technology, but when we can achieve profit maximization goal without improving production technology, we will not improve production technology. This will cause certain losses in social competition and make the society lose the driving force of technological progress to a certain extent.
2. Completely monopolizing the market will cause the loss of production efficiency. Under the condition of complete monopoly market, monopoly enterprises have the conditions and ability to carry out large-scale production. If a monopoly enterprise carries out large-scale production, it can reduce the product cost, increase the product output, obtain the best production efficiency, and promote the improvement of social production efficiency while obtaining rich profits. Monopoly enterprises monopolize the market supply and have no competitors, so they can get rich profits by reducing output and raising product prices, rather than increasing profits by spending a lot of money to buy advanced machinery, equipment and technology to improve production efficiency. For monopoly enterprises, it is easier to make profits by reducing production and raising product prices than by improving production efficiency, and the profit cost is lower. There is no need for monopoly enterprises to improve production efficiency. If monopoly enterprises in all industries can only make huge profits by reducing production and raising product prices, then no one will try to improve production efficiency, which will inevitably lead to the loss of social production efficiency. Under the condition of perfect competition, every enterprise produces at the lowest point of long-term average cost and short-term average cost. Under the condition of complete monopoly, although the manufacturer produces balanced output at the lowest average cost of the selected production scale, it is not the scale of producing products at the lowest possible average cost. If a monopoly manufacturer expands its long-term equilibrium output, it will be able to produce more output at a lower average cost.
3. Completely monopolizing the market will cause the loss of social output. Under the condition of complete monopoly market, because monopoly enterprises completely monopolize market supply, the output produced by monopoly enterprises determines the total amount of products supplied by the market. Generally speaking, the output of monopoly market is lower than that of perfect competition market, because under the condition of perfect competition market, enterprises produce according to the lowest average cost, that is, according to the best output, and the output of social products is more. Under the condition of complete monopoly market, monopoly enterprises produce according to the output determined by profit maximization, and the output determined by profit maximization can only be lower. Because monopoly enterprises monopolize the whole market supply, only by reducing production to reduce the number of products supplied to the market, products will be in short supply, and then products can be sold at high prices in the monopoly market, and monopoly enterprises can obtain maximum profits. The production scale determined by this profit maximization is not the socially optimal production scale, and its output is not the socially optimal output. In the case that profit maximization determines the output of monopoly enterprises, because the production conditions and production capacity of monopoly enterprises have not fully played their roles, monopoly markets first cause the loss of social production conditions and production capacity, and finally cause the loss of social output.
4. Completely monopolizing the market will cause the loss of consumers' interests. Under the condition of complete monopoly market, because monopoly enterprises monopolize market supply and control market prices with monopoly power, consumers can only be forced to accept the high market prices controlled by monopoly enterprises. In this way, the prices of products and services purchased by consumers at high prices seriously deviate from their values, and the interests of consumers seriously deviate from their rights, which will inevitably cause great losses to the interests of consumers. In essence, all kinds of losses caused by monopoly enterprises to consumers are the plunder of consumers' interests and rights by monopoly enterprises. The loss caused by monopoly enterprises to consumers not only violates the basic principle of equivalent exchange under the condition of market economy, but also hinders the progress and development of society. At the same time, it is difficult for monopoly enterprises to correctly understand and improve their behaviors that harm consumers' interests. Therefore, the government must take strong measures to intervene. For example, adjust the product prices of monopoly enterprises, or even set prices directly, and levy reasonably high taxes on them, thus reducing the excessive monopoly profits of monopoly enterprises; Strengthen the supervision and punishment of monopoly enterprises, discover and stop the damage of monopoly enterprises to consumers in time, and so on.