The main types of monopolies and their characteristics
In modern life, varioustypes of monopolies. The term "monopoly" is understood to mean such enterprises and organizations, the scale of which covers a large part of the country's market. They receive the priority right to establish prices for certain types of goods and services, they have the opportunity to suppress or join small companies.
It is possible to single out specific types of monopolies,grouping them according to a certain classification criterion. For example, depending on the scale of the impact on the economy of the country there is an absolute and pure monopoly. The latter implies the presence of a large enterprise, which concentrates on a particular industry. In this case, the appearance of competitors in the market is almost impossible, and the monopolist fully controls the movement of the product produced in the market and the level of prices for it. Absolute monopoly is characterized by state regulation, all processes occurring on the market are in the hands of state bodies that establish the basic principles of activity.
One can single out some types of monopolies,based on the criteria for the reasons for their occurrence. These include artificial and natural, as well as legal monopolies. The latter have a "talking" name and are formed under the influence of the current legislation. Among them, the patent system - the attribution to the author of an invention of the rights of possession or the issuance of a permit for the performance of a certain type of activity - has become widespread. The legal monopoly includes the development and registration of a certain trademark, which subsequently becomes known throughout the world and is a certain guarantor of the quality of the product.
Natural monopolies are thoseenterprises and organizations that in their production activities use either rare materials that are inaccessible to other industrialists or special technologies. In our country there are only about half a thousand such enterprises among four thousand different monopolists. One can single out such types of natural monopolies as:
- companies involved in the production process, rare types of metals, special grape varieties and other elements that are not easy prey for producers;
- firms and organizations that have secured government support, for example, engaged in the production of military equipment, construction of roads and residential complexes.
Natural monopolists have a hugeinfluence on the economy of the country, as they direct the process of pricing in the market. Due to the large volume of production, the cost of raw materials is reduced, which makes it possible to reduce its prime cost. And this creates serious problems for firms that produce similar products, but in smaller volumes, because they have to find ways to reduce prices in order to retain their positions in the market.
There are companies that are trying to covermost of the market, purposefully expand the scale of production and capture a certain area. Such types of monopolies are called artificial and presuppose the achievement of specific goals and benefits by implementing the developed measures. They do everything to win a large part of the market and control the activities of competitors. To this end, special monopoly associations are created, the participants of which have privileged rights to enter the market and carry out sales activities. All other companies do not get such an opportunity. Artificial monopolists make every effort to develop their own equipment and technologies, so their products are in high demand and receive only positive feedback from the consumer group.
Having described what a monopoly and its types are,to draw a conclusion about the role of such large-scale organizations in the country's economy. In this case, we can say about the dual nature of the influence, since on the one hand, the monopolies contribute to the improvement of production activities, and on the other, the complete absence of competition in the market negatively affects pricing. In addition, it is very difficult for young entrepreneurs to start their own business and take their own niche in the market.
