1. Monopoly market The concept of monopoly or complete monopoly is just the opposite of complete competition. In a perfectly competitive market, many manufacturers produce a homogeneous product, and the products of different manufacturers can be completely replaced. The definition of monopoly is that there is only one producer of a certain product and there is no good substitute for this product. This manufacturer is called a monopolist. So the output of monopoly manufacturers is the output of the industry, and the demand curve faced by monopoly manufacturers is the demand curve of the industry.
Second, the conditions for monopolizing the market.
1. Only one manufacturer produces and sells goods in the market.
There is no similar substitute for the goods produced and sold by this manufacturer. For example, power plants have a monopoly on lighting energy, because candles or kerosene lamps are substitutes for electric lights, but they are not similar substitutes.
It is extremely difficult or impossible for any other manufacturer to enter this industry. In such a market, exclusive monopoly manufacturers control the production and market sales of the whole industry without any competitive factors, so monopoly manufacturers can control and manipulate market prices.
Third, the reasons for monopoly
1. economies of scale (natural monopoly) The production of some products has very significant economies of scale, and the stage of increasing returns to scale can last until high output, so the cost for one manufacturer to supply the whole market is much lower than that for several manufacturers to carve up the market. For example, public utilities such as power supply and running water are typical natural monopoly industries.
2. Patent is a form of monopoly permitted by government and law, because patent prohibits others from producing a certain product or using a certain technology unless the patentee agrees. Patents protect inventions and innovations and encourage people to invest in R&D, because it takes a lot of time, manpower and financial resources to carry out R&D and inventions. For example, it took Microsoft Corporation of the United States four years to develop Windows 2000 computer operating system software, and the investment exceeded 654.38+0 billion dollars. However, once a new product is invented, the cost of imitation is much lower. If there is no patent system, who wants to invest in research and development of new products? However, the monopoly position brought by patents is temporary, because patents have legal restrictions. In China, the validity period of a patent is 15, and in the United States it is 17.
Fourth, the control of resources means that a manufacturer controls the resources necessary to produce a certain product, so it is often called the monopolist of the product market. The most typical example is Alcoa before World War II, which controlled the mining of bauxite in the United States from the end of 19 to the 1930s, thus becoming the monopolist of the aluminum industry in the United States. South Africa's "Debir" company owns and controls four-fifths of the diamond mines on the earth, becoming a monopolist in the world diamond market. For another example, all chromium mines are concentrated in South Africa and controlled by a few producers, which also forms a natural monopoly.