Principal monopolies and their characteristics

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2018-03-22 01:17:08

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In modern life, discusses the various types of monopolies. The term “monopoly” is defined as companies and organizations scale of activity which covers a large part of the market. They get the priority right to establish prices for certain types of goods and services, are able to suppress or to join smaller companies.

There are specific types of monopolies, grouping them according to a certain classification criterion. For example, depending on the magnitude of the impact on the economy is absolute and pure monopoly. The latter requires a large enterprise that concentrates on a particular industry. In this case, the emergence of competitors in the market is almost impossible, and the monopolist fully controls the movement of the manufactured product on the market and level of prices. For absolute monopoly characterized by state regulation, all the processes occurring in the market, are at the mercy of state authorities, which establish the basic principles.

There are certain types of monopolies based on the criteria of their cause. To those should include artificial and natural and legal monopolies. The latter have “speaking” the name of and shaped by existing legislation. Among them widespread patent system – the assignment to the author of an invention ownership rights or permit the exercise of a particular activity. To legal monopolies include the development and registration of a certain trademark, which later became famous throughout the world and is a guarantor of the quality of the product.

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Natural monopolies are those businesses and organizations that their operations are used or rare materials not available to other manufacturers, or special technology. In our country there are only about five hundred of such enterprises among the four thousand different monopolists. You can select these types of natural monopolies, such as:

  • Company involved in the production process of rare types of metals, special varieties of grapes and other items that are not easy prey for manufacturers;
  • Firms and organisations, which has enlisted the support of the government, for example, involved in production of military equipment, road construction and residential complexes.

Natural monopolies have a huge impact on the economy, since they guide the process of pricing in the market. Due to the large volume of production reduced the costs of raw materials, which reduces its cost. And this creates serious problems for firms engaged in production of similar products, but in smaller amounts because they have to find ways of reducing prices in order to retain their position in the market.

There are companies that aim to cover most of the market, purposefully expand the scale of production and capture a certain area. Such monopolies are called artificial, and involve the achievement of specific objectives and benefit by implementing the recommended measures. They do everything to win most of the market and monitor the activities of competitors. For this purpose a special monopolistic enterprises, which have privileged rights of entry and implementation of sales activities. All other companies do not get such opportunities. Artificial monopolies are making every effort to develop their own techniques and technologies, so their products are in great demand and receives only positive feedback from consumer groups.

Describing what a monopoly and its types, I want to conclude on the role such large-scale organizations in the economy. In this case we can say about the dual nature of influence, since on the one hand monopolies contribute to the improvement of production activities, and on the other a complete lack of competition in the market affects pricing. In addition, young entrepreneurs is extremely difficult to start a business and occupy its own niche in the market.

 


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Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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