Negative effects: Monopoly and competition are inherently contradictory. Due to the lack of competitive pressure and development motivation, coupled with the lack of strong external constraints and supervision mechanisms, the service quality of monopoly industries is often unsatisfactory, which often violates market rules and infringes on consumers' fair trading rights and choices.
Monopoly category
1, franchise
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.
2. Natural 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.
3. Strategic monopoly
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.
4. Other monopoly barriers
The above obstacles are not exhaustive, nor are they necessarily mutually exclusive. If the manufacturer controls the supply of a certain raw material. Any barrier that prevents competitors from entering the market is the cause of monopoly. ?
The above contents refer to Baidu Encyclopedia-Monopoly.