Types and forms of monopoly:
1, licensed monopoly:
Some exclusive privileges are stipulated by law and protected by law, patents and copyrights are monopolies licensed by law. In order to encourage creativity and invention, the vast majority of countries have enacted patent laws, which can be seen in the patent monopoly is caused by legal barriers. In some occasions, the government grants a manufacturer the right to monopolize; also sometimes the government after bidding competition through the form of contract to grant exclusive privileges.
2, natural monopoly:
If a certain product requires a large investment in fixed equipment, and large-scale production can lead to a significant reduction in costs, then a large manufacturer may become the sole producer in the industry. The average cost is lowest when the entire market demand is supplied by one large manufacturer, and it is difficult for two or more manufacturers to operate profitably in that market, in which case the manufacturer forms a natural monopoly.
3, strategic monopoly:
If no one other than the monopolist possesses a certain production technology or know-how, the market will naturally form a technical monopoly. In the absence of both technical and legal barriers, manufacturers build barriers to establish or consolidate their monopoly position, which is a strategic monopoly.
4, other monopoly barriers:
The above barriers are not exhaustive and are not necessarily mutually exclusive. If a manufacturer controls the supply of a certain raw material. Any barrier that prevents competitors from entering the market is a cause of monopoly.
Expanded Information:
Harms of Monopoly:
Monopoly and Competition are inherently a pair of contradictions, due to the lack of competitive pressures and development incentives, coupled with a lack of strong external constraints and monitoring mechanisms. Due to the lack of competitive pressure and development momentum, coupled with the lack of strong external constraints and monitoring mechanisms, the quality of service in monopolized industries is often unsatisfactory, and often violates the laws of the market, violating the right of consumers to fair trade and the right to choose. This is a law, China and foreign countries alike.
Price monopoly pulls up the cost of the whole society monopoly industry is engaged in the general and the majority of people, the industry is closely related to the public **** business, such as telecommunications, postal services, water, electricity, gas, railroads, aviation and so on. Because these industries permeate all aspects of society, so the price of services in these industries is related to the cost of the whole society. The overall efficiency of these industries is directly related to the ability of other industries to participate in international competition.
Telecommunications, railroads and other sectors in the planned economy used to be part of the state administration, but when these sectors entered the market, they themselves still had a monopoly, and once they began to pursue profits in the market, they transferred a large number of consumer benefits to their hands through monopoly pricing, so that privileged sectors and privileged companies got profits that were much higher than the prices in the competitive market. The result raises the cost of competition for society as a whole.?
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