Why does a company become a monopoly?

monopoly

Market form in which a supplier faces a large number of buyers. In order to achieve his maximum profit, the monopolist can either set the price or the quantity of a product (but not both at the same time) autonomously in accordance with "his" demand function. Its leeway depends on the elasticity of private demand and possible government intervention. The (ideal-typical) monopolist realizes his profit maximum with the sales volume (in the so-called Cournot point; after A. Cournot 1838), the marginal costs of which are identical to their marginal revenue.

Monopoly (literally: sole sale) is a market form with only one provider, the monopolist. Market form in which there is only one supplier of a specific product on the market. With this type of market, this provider has almost complete freedom to determine his sales prices. This freedom is limited by substitute goods, the threat of further competitors entering the market and legal restrictions.

Contrast: Polypol.

The monopoly is a form of market in which there is only one, but large, market participant on the market. If there is a monopoly on both the supply side and the demand side, one speaks of a bilateral monopoly.

Market forms

Basically, a distinction must be made between supply and demand, whereby only the former is dealt with here. While a perfect market is called a monopoly, an imperfect market is a monopoly.
1. Within the framework of the morphological market form scheme, the monopoly is characterized by the fact that there is only one supplier facing the buyers.
2. Monopolistic behavior exists when a provider behaves as if he had no competitors. This can also be the case with other market forms.
One differentiates the monopoly in:
natural M., d. H. For example, one supplier alone has one raw material.
Artificial M. that come about either on the basis of public or private law regulations (e.g. certain sub-areas of the Post, patents, concessions, cartel). The maximum profitable price in a monopoly is called the Cournot point.

In socialist economics: an enterprise, federation, association or convention of enterprises which concentrate in their hands the production and sale of a significant part of the products of one or more branches of production in order to obtain monopoly profits.

Monopolies have a high degree of socialization of production. a strong financial capital and monopoly profit are a prerequisite.

While free competition strives for maximum profits through a technical lead over competition and free migration into the branches with the highest rate of profit, monopoly must strive for maximum profit by securing its monopoly rule.

Monopolies can be understood not only as economic monopoly structures, monopolies also have a political monopoly structure that affects society and the state.

Economic monopoly structures (quantitative concept of monopoly):

A monopoly is a large enterprise or group of companies which dominates and controls part of production and raw materials, trade and services and can set prices and the rate of profit arbitrarily over a more or less long period.

The spectrum of economic monopoly structures extends from weak forms of association. z. B. Cooperation in development, production or marketing, through the formation of business associations to represent common interests, breakfast cartels, pools to cartels (e.g. price, quota and sales cartels) and mergers. Monopoly forms such as corporations emerged. Holdings, cartels, corporations, trusts and temporary consortia. The focus areas are industrial, banking, trade and financial monopolies. These forms and areas are organized nationally, internationally and transnationally (e.g. Trans-National Corporation (TNC), Multinational Corporations (Multis), Transnational Enterprises (TNU)). To secure their monopoly position and monopoly profit, monopolies have to act internationally. B. because of the need for raw materials and the use of international science and technology. The production in "low-wage countries" ensures the monopolies a higher degree of exploitation and the international activity opens up new sales markets, improves the position in the division of the markets.

Business combinations and mergers are today further steps in the expansion of the market position towards further monopoly on the international level. Today, corporate mergers are widely understood as an equity participation (capital interlocking) of one company in another. Corporate mergers to form monopolies represent a considerable increase in the power of the companies involved. The causes of corporate mergers are the rapid expansion in a market up to globalization, the use of economies of scale and quantity as well as a greater variety in production (flexibilization) and in products (diversification ), as well as greater flexibility and the ability to innovate through svnergy.

The marked increase in company mergers in Western Europe in the 1980s and 1990s, known as the “wave of mergers”, was triggered by the formation of the European internal market. In order not to stand outside a possible protectionist “fortress Europe”, non-EU companies bought their way into the new market through takeovers. EU companies themselves merged or took over smaller competitors in order to be present in the new, larger market and to be armed against competition from third countries.

In the Federal Republic of Germany alone the 250 industrial monopolies made a turnover of 1.98 trillion DM in 1997. The total industrial turnover in 1997 was 2.18 billion DM. In 1997 the 50 largest monopolies were able to increase their reported profits by 28.6 percent.

Political monopoly structures (qualitative concept of monopoly):

Monopolies are also a qualitative factor. The realization, enforcement and safeguarding of high and increasing monopoly profits also requires a higher level of aggressiveness in order to achieve these goals. The policy of international economic expansion of monopoly capital is the core of imperialism.

The economic structures of the monopolies are reflected in all areas of society. The monopoly permeates them and subjects them to the interests of capital exploitation, which has an impact on political and social mechanisms.

In order to achieve and secure its monopoly profit, the monopoly needs the state. State monopoly capitalism emerges from the close economic and political interlocking through to the amalgamation of the state, financial monopolies and industrial monopolies.

Examples of other monopoly theories:

The basis of a theory of monopolies and imperialism is the struggle for the “economic surplus”, which describes the difference between what capitalist society produces and the cost of production. The central meaning of the category “surplus value” is replaced in this theory by the category “economic surplus”. The core of the theory is also the law of growing economic surplus and the goal of realizing the efforts of the monopolies.

Other positions of various monopoly theories:

- Monopolies are only an economic form of organization and power, independent of state power.

- The basis of the analysis of monopoly does not lie in the process of centralization and concentration of capital, but in the development of all contradictions inherent in capital.

- Monopolies are undesirable developments, disruptive factors for the free market.

- “Market economy” theorists deny the “totality” of the rule of monopoly capitalism and its function as the core of imperialism.

> Sales monopoly,> Agricultural monopoly,> Allfinanz,> Bank consortium,> Land monopoly,> Federal Cartel Office,> Dyopol (Dyopol),> Unbundling,> Expansion, economic,> Financial conglomerate,> Financial monopoly,> Financial oligarchy,> Free production zone,> Breakfast cartel,> Merger control ,> Merger,> trade monopoly,> holding,> imperialism,> industrial monopoly,> capital, concentration of,> capital, centralization of,> capitalism,> capitalism, state monopoly,> competition. monopoly,> conglomerate,> corporation,> corporation, transnational,> market monopoly,> monopoly, international,> monopoly bank,> monopoly commission,> monopoly price,> monopoly profit,> monopoly rent,> multinationals,> oligopoly,> polypol,> transnational companies (TNU ),> Trust,> Oligarchy.

Market form with only one provider (monopolist) on a homogeneous or heterogeneous market. In addition to this structural designation, which is based on the number of economic entities, a large number of criteria are dealt with within the framework of the monopoly theory.

Previous technical term: Monomorphic social influence | Next technical term: monopoly, natural



Report this article to the editors as incorrect & mark it for editing