1, market size
When the market is large enough, enterprises have enough space to expand and achieve cost reduction and efficiency improvement through economies of scale. Enterprises with competitive advantages can occupy a dominant position in the market, suppress other competitors, and then achieve market monopoly.
2. Technological innovation
In some fields, technological innovation can bring huge competitive advantages to enterprises and make them become the market leaders. This technological advantage may come from patent protection, technical barriers and other factors. When an enterprise owns a core technology and applies it to products or services, it is likely that competitors will not be able to imitate or follow it.
3. Capital concentration and policy support
In some industries, especially capital-intensive industries, enterprises need a lot of capital investment to enter the market. Capital concentration is beneficial for enterprises to gain more market share and form economies of scale, which may eventually lead to market monopoly. In addition, policy support may also lead to market monopoly in some cases.
The influence of monopoly on economy and society;
1. Monopoly may affect fair competition in the market and make it difficult for competitors to enter the market. This will lead to the slowdown of innovation and progress, because monopolists occupy an dominant position in the market and may not have enough motivation to carry out technological innovation and improve products or services. In addition, monopoly enterprises may realize excess profits by controlling output and price, so that consumers will bear higher price costs.
2. Monopoly may lead to the imbalance of resource allocation. In a monopoly market, resources may be excessively concentrated in the hands of monopoly enterprises, resulting in the lack of resources in other potential competitors and industries. This imbalance in resource allocation may affect the stability and efficiency of the entire economic system.
3. The influence of monopoly on society cannot be ignored. Monopoly enterprises may aggravate the polarization between the rich and the poor by controlling market share and price. Because monopoly enterprises can obtain excess profits, the income of company executives and shareholders may be much higher than that of ordinary employees and consumers, thus increasing the social wealth gap. In addition, monopolizing the market may lead to a reduction in consumer choices.