Monopoly refers to a small number of large capitalist enterprises that, in order to obtain high profits, manipulate and control the production, sales and prices of goods in one or several departments through mutual agreement or alliance.
1. There are three reasons for the emergence of monopoly:
1. When production concentration develops to a very high level, a very small number of enterprises will join forces to manipulate and control the activities of their own departments. Production and sales are monopolized to achieve higher profits.
2. The huge scale of enterprises will restrict competition and create monopolies.
3. Fierce competition is causing more and more serious losses to all competing parties. In order to avoid losing both sides, companies will reach compromises, join forces, and implement monopolies.
2. Monopoly does not eliminate competition, but makes competition more complex and fierce. The reasons are:
1. Monopoly does not eliminate the economic conditions that create competition. Competition is a general law of commodity economy. After the emergence of monopoly, not only did it not change the capitalist private ownership of the means of production, but it also promoted the continued development of the commodity economy, so it was impossible to eliminate competition.
2. Monopoly must be maintained through competition. Each monopoly organization develops and grows through competition. After obtaining a certain monopoly position, due to the internal motivation to grab high profits and the external pressure faced by more powerful competitors, the monopoly organization must continuously enhance its competitive strength and consolidate itself. monopoly position.
3. Society is complex and diverse, and it is impossible for any monopoly organization to cover all aspects of society. In fact, in addition to monopoly organizations, there are also a large number of small and medium-sized enterprises, and competition among these non-monopoly enterprises also exists.
Even in a sector with a high degree of monopoly, it is impossible for there to be only one monopoly organization. In order to consolidate their monopoly position and obtain more monopoly profits, various monopoly organizations will inevitably launch fierce competition among themselves.
Extended information:
Types of monopoly:
1. Franchise monopoly: Some exclusive business privileges are stipulated and protected by law, patents Rights and copyrights are monopolies granted by law. In order to encourage creation and invention, most countries have enacted patent laws. It can be seen that patent monopoly is caused by legal barriers.
In some cases, the government grants a manufacturer the exclusive right to operate; sometimes the government grants exclusive operating privileges in the form of a contract through bidding competition.
2: Natural monopoly: If a certain product requires a large investment in fixed equipment and large-scale production can greatly reduce costs, then a large manufacturer may become the only producer in the industry. When one large manufacturer supplies all market demand, the average cost is the lowest. If two or more manufacturers operate in the market, it will be difficult to make profits. In this case, the manufacturer forms a natural monopoly.
3. Strategic monopoly: If no one else except the monopolist masters a certain production technology or know-how, the market will naturally form a technical monopoly. When there are neither technical barriers nor legal barriers, manufacturers establish or consolidate their monopoly position by building high barriers. This is a strategic monopoly.
4. Other monopoly barriers: The above barriers do not list all factors, and they are not necessarily mutually exclusive. For example, a manufacturer controls the supply of a certain raw material. All barriers that prevent competitors from entering the market are causes of monopoly.
Baidu Encyclopedia-Monopoly