Perfect and imperfect competition

Monopoly and competition are antipodes in economic theory.

Definition 1

Manufacturer competition is defined as a confrontation between product manufacturers for the right to receive maximum profit from the sale of goods, which is most often carried out by increasing the share of an individual manufacturer in the sales market.

Note 1

To successfully compete, a certain company needs to produce high-quality goods, as well as constantly increase it technical level. A company operating in a competitive environment is able to increase profits through the widespread development of previously unproduced advanced products, including significantly modernized products.

In accordance with the number and “share” of manufacturers in the market and their ability to influence the price of products, competition can be classified into several types:

• Perfect competition.
• Imperfect competition.

Perfect competition is said to exist when none of the many sellers can significantly influence the price of a product. In conditions of perfect competition, producers are able to independently determine the volume of output, taking into account the current market price and the amount of their costs.

Note 2

In its pure form, perfect competition is practically absent in real life. Most often you can find imperfect competition, which has many varieties.

Imperfect competition appears when there is a limited number of producers (sellers) operating in the market for a certain product who are able to determine to some extent two main parameters:

• volume of sales,
• product price.

Imperfect competition is divided into three types:

1. Oligopoly.
2. Natural (pure) monopoly.
3. Product differentiation.

Interaction between monopoly and competition

The relationship between competition and monopoly is one of the pressing problems of modern economics. The trend of monopolization has many prerequisites, the most important of which is the structure of the economy of our country, formed in the second half of the 20th century.

The consequence of the formation of this structure was a rapid transition to market relations, which showed the imperfection of antimonopoly legislation. Practice has shown that state antimonopoly policy should be formed over several decades, requiring continuous improvement due to the variability of the economic environment.

According to market theory, competition and monopoly are different types of market structures. Their varieties are:

• Oligopoly.
• Pure competition.
• Pure monopoly.
• Monopolistic competition.

The classification is based on the following characteristics:

• Number of enterprises in the industry.
• Entry barriers.
• Product type, etc.

The peculiarity of competition is that it can lead to a monopoly, while certain contradictions appear between them. The purpose of the emergence of monopolistic structures is to weaken and destroy competition. At the same time, monopolies do not destroy competition, but... on the contrary, they lead to its strengthening, changing its types and forms of manifestation.

IN market conditions The emergence and dominance of monopolies in the production sector leads to the following facts:

1. Changing the nature of competition, in which competition becomes monopolistic;
2. The global nature of competition, the entry of enterprises into international markets and the acquisition of an international character by competition;
3. When a mixed market economy operates, competition may occur between monopolies, within them, as well as between monopolies and outsider companies.

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Introduction
§ 1. The essence of competition 1.1. What is competition? 1.2. Market competitiveness § 2. Types of competition 2.1. Perfect competition 2.3. Oligopoly Chapter 2. Monopoly: economic nature, causes, forms § 1. The essence of monopoly § 2. International monopolies § 3. Monopolization of the economy § 4. Monopoly and competition Chapter 3. Economic consequences of monopoly. Antimonopoly regulation § 2. Monopolistic actions and restriction of competition: qualification issues Russian Federation
Conclusion
List of sources used

Introduction

Main feature market economy is freedom of choice: the manufacturer is free to choose the products he produces, the consumer is free to purchase goods, the employee is free to choose his place of work, etc. But freedom of choice does not automatically ensure economic success. It is won through competition.

As evidenced by general and special encyclopedic dictionaries and reference books, COMPETITION (FROM LAT. CONCURRERE - TO CLASH) IS RIVALRY BETWEEN PARTICIPANTS OF THE MARKET ECONOMY FOR THE BEST CONDITIONS OF PRODUCTION, PURCHASE AND SALE OF GOODS.

The term, we note, is ancient, Latin, as is the phenomenon itself defined by this term. However, the competition is older. Its deep roots lie in the need to constantly wage a struggle for existence, for relatively better living conditions, the extreme form of which can be considered the struggle for survival.

The history of human society, economic and otherwise, is also the history of competitive struggle, the history of changes in its forms and methods in accordance with the changing conditions of social life. The creation of ancient and medieval empires, grain and salt riots, the hundred-year, seven-year and other wars, the expeditions of Columbus and Vasco da Gama, the “Pugachevschina” and “Yezhovshchina”, pogroms, genocide and the Tatar-Mongol yoke, all these events at, it would seem, significant differences among themselves were in one way or another generated by the desire to fight for existence, i.e., competition.

There is no competition based on collectivism and planning. Competition can be neither capitalist, nor socialist, nor feudal, nor slave-owning, nor primitive communal. She cannot be bad and good. We must be prepared for various methods of market competition, including the bankruptcy of enterprises, which will inevitably entail unemployment. We must also keep in mind the possibility of social stratification of society, reaching the point of polarization.

In this course work a peculiar a universal approach to covering the theory of competition and monopoly, their types and special role in the functioning mixed economy. It is known that in reality the economy of any country is mixed , since theoretical models of a market economy describe the economy of a fairly local area, and in practice (on a state scale) the laws of several economic models operate simultaneously. Thus, competition occupies a dominant position in the economy of any state, but has a variety of forms. The importance of competition in the economy of any country is also determined by the level economic development country, its position and influence in the international sphere of market relations.

The problem of monopoly in economics has been of interest to economists for almost the entire twentieth century. This topic has been and will remain relevant as long as there are global economic giants that firmly occupy a monopoly position in production.

Monopolies can be treated differently; society has been fighting them for more than a hundred years, but one cannot see monopolies as all the world’s evils or consider them only the basis of economic well-being.

The attitude of the public and the state towards various forms of imperfect competition is always ambivalent due to the contradictory role of monopolies in the economy. On the one hand, monopolies limit output and set higher prices due to their monopoly position in the market, which causes irrational distribution of resources and increases income inequality. A monopoly, of course, reduces the standard of living of the population. Monopolistic firms do not always make full use of their capabilities to ensure the growth of scientific and economic potential. The fact is that, due to the existence of restrictions on entry into the industry, monopolies do not have sufficient incentives to increase efficiency through scientific and technical progress, since there is no competition.

On the other hand, there are strong arguments in favor of monopolies. The products of monopolistic companies are of high quality, which allowed them to gain a dominant position in the market. Monopolization has the effect of increasing production efficiency: only a large firm in a protected market has sufficient funds to successfully conduct research and development.

We should also not forget that large monopolistic associations play the role of a kind of “buffer”, holding back the fall in production and, consequently, the increase in unemployment during the crisis. Figuratively speaking, large monopolies are the supporting nodes of the entire structure of the national economy.

Given the dual nature of monopolistic associations, governments of countries with developed market economies are trying to resist monopolism to some extent by supporting and encouraging competition.

In Russia, over the years of economic transformation, a special system of economic management has developed, incomprehensible to the whole world. In accordance with this, the action of competitive laws is chaotic and has its own special forms.

Chapter 1. Competition and its types

§ 1. The essence of competition

1.1. What is competition?

What is competition and what should those entering business life know about it?

First of all, let us emphasize: the rigidity and conflict nature of competitive interaction between entrepreneurs has not decreased at all due to the widespread deployment integration processes in foreign economies. Competition has been and remains a form of mutual rivalry - with winners and losers - of subjects of a market economy. Competition is determined by the sovereign right of each of the subjects of business relations to realize their economic potential, and this inevitably leads to a clash between them, to achieving the goals set by entrepreneurs by infringing on the interests of other business people. In other words, competition in a modern civilized market economy is not at all a competition according to the Olympic principle: it is not victory that is important, but participation. The inevitability of competition between entrepreneurs is caused by the priority of buyers over sellers in the modern market. In their quest to satisfy consumer demands, entrepreneurs realize their own economic sovereignty only by entering into mutual competition for consumer attention.

On the contrary, the predominance of a seller's market results in competition between buyers for the attention of sellers.

The concepts of “competition” and “competitive market” are usually distinguished. The first refers to the ways individual firms behave in the market, the second refers to market structures and covers all aspects of the market for any product (such as the number of firms, production technology, types of goods sold, etc.) that influence the behavior and activities of firms.

1.2. Market competitiveness

It is determined by the limits within which individual firms are able to influence the market, that is, influence the conditions for the sale of their products, primarily prices. The less influence individual firms have on the market where they sell their products, the more competitive the market is considered to be. Highest degree Market competitiveness is achieved when an individual firm does not exert any such influence. In this case, there are so many firms operating in the product market that each of them individually does not influence the price of the product in any way, but perceives it as a value determined by market demand and supply. Such a market is called perfectly competitive. Firms operating in a perfectly competitive market do not compete with each other.

If individual firms are able to influence the terms of sale of their products (primarily prices), then they compete with each other, but the market is no longer considered completely competitive.

When a group of firms produces and sells the same, homogeneous goods, then these firms are considered to form an industry.

A curve that shows how much of a firm's good is produced by buyers at each price of the good, called individual demand curve companies. If an individual firm knew its demand curve, it would not be difficult for it to determine the volume of sales and the income received from it. If the firm's costs were also known, it would be able to find the appropriate volume of production and maximize profits.

But in real life you can install market demand the entire industry, not just a single company. In order to determine what the sales volumes of the produced goods will be if it changes the price of the goods, the firm must know how other firms in the industry will behave (since their reaction to the actions of the firm will certainly affect the level of its sales), i.e. know the structure market. The course “Economics” examines four theoretically possible market structures, and it is believed that they cover the majority of actually existing market structures: 1) perfect competition;

2) monopoly; 3) monopolistic competition; 4) oligopoly.

Before moving on to the analysis of the functioning of an individual company in these market structures, let us dwell on the principles inherent in all these structures.

1.3. General principles behavior of the company in the market

Let us introduce the category of marginal income necessary for further research (MR), which is understood as the change in the total income of the company (TR), caused by the sale of one additional unit of goods, in other words:

A company seeking to maximize profits must decide two fundamentally important questions: 1) whether it should continue its activities; 2) if so, to what extent. It makes sense for a company to continue operating if achieved level production, its income exceeds variable costs. A firm should stop production if total income from the sale of the goods produced by it does not exceed variable costs (or at least is not equal to them) - rule 1.

To what level should the firm expand its output? Common sense dictates that if producing one additional unit of a good generates income that exceeds the cost of producing that unit of good, then the firm can increase its output. The firm does not need to expand production if the income from the sale of the last unit of production becomes equal to the costs of its production. This is equivalent to the following statement: if a firm decides to continue production, then it must produce the quantity of output at which marginal revenue equals marginal cost - rule 2.

These two rules are universal and apply to any market structure.

§ 2. Types of competition

2.1. Perfect competition

Perfect competition exists in areas of activity where there are quite a lot of small sellers and buyers of an identical (same) product and therefore none of them is able to influence the price of the product.

Here the price is determined by the free play of supply and demand in accordance with the market laws of their functioning. This type of market is called a "free competition market".

The existence of a huge number of buyers and sellers means that none of them has more information about the market than the others. When a seller comes to the market, he finds an already established price level, which is beyond his power to change, because the market itself dictates the price at every moment of time. This situation allows new sellers to start producing products on equal terms (price, technology, legal conditions) with existing sellers. On the other hand, sellers can freely leave the market, which implies the possibility of unhindered exit from the market. Freedom of “market” movement creates conditions for the number of producers to always change in the market. At the same time, the remaining sellers still lack the ability to control the market, since they represent small-scale production and are extremely numerous.

Now let us formulate the main characteristics of a perfectly competitive market:

A large number of small sellers and buyers,

The product sold is homogeneous for all manufacturers, and the buyer can choose any seller of the product to make a purchase,

The inability to control the price and volume of purchase and sale creates conditions for constant fluctuation of these values ​​under the influence of changes in market conditions,

Complete freedom to “enter” and “leave” the market.

In real economic reality, a market of perfect competition in a strict theoretical sense, as stated above, practically does not occur. It represents the so-called "ideal" structure, implying that free competition exists rather as an abstract idea, towards which actually existing markets can only aspire to a greater or lesser extent. But still, in economic practice there are markets for some goods that best fit the criteria of a given market structure (for example, the securities market or the market for agricultural products). Here the number of buyers and sellers is so large and they are so “small” that, with rare exceptions, no one person or group is able to control the market for certain types of securities or agricultural products. Moreover, the goods on these markets from all manufacturers are completely identical and the latter have complete information about changes in the market. All this confirms the need to use a special “exchange” form of organization for such a market (a commodity exchange for agricultural products or a stock exchange).

In the presence of competition in the market, manufacturers strive to reduce production costs per unit of production in order to obtain maximum profits. As a result, the price can be reduced, which increases the manufacturer's sales volume and income. The most effective way to achieve this is to use scientific and technological improvements and innovations in production. The introduction of scientific and technological advances makes it possible to increase labor productivity, which precisely leads to a future reduction in prices, which, however, brings more income to the innovator company.

Competition creates incentives for producers to constantly diversify the goods and services offered in order to conquer the market. Expansion of the range of products offered for sale occurs both through the creation of completely new goods and services, and through the differentiation of an individual product.

Manufacturers are constantly fighting for buyers in the market. The result of such a struggle is a sales promotion policy that thoroughly and comprehensively studies consumer demand and creates new forms and methods of selling goods. All this, on the one hand, increases the company’s profits, and on the other, satisfies all the desires and needs of the buyer. As a result, both the consumer and society as a whole benefit.

The theory of a perfectly competitive market can be applied without any changes to individual actually operating industries or serve as a basis for identifying patterns inherent in other market structures. When considering the behavior of a firm under conditions of perfect competition, we must start from two fundamental assumptions:

1) the volume of production of an individual firm is so insignificant in comparison with the output of the entire industry and varies within such limits that this does not have any effect on the price of the goods it sells;

2) the industry where the company we are considering operates is free for entry and exit. This means that any firm, if it wishes, can start producing a given product and enter the industry, or stop producing this product and exit the industry. Firms within an industry have no influence on these decisions.

From the first assumption it follows that the demand curve of an individual firm is horizontal, i.e., the demand for the products of an individual firm is absolutely elastic. This type of demand curve does not mean that a firm can sell any quantity of a good at a given price. Absolute elasticity of demand must be taken in the sense that, within the framework of a possible expansion of production, the firm will not influence the price of the product.

As in the case of costs, we introduce the concepts of total and average income (we gave the definition of marginal income earlier):

– total income (TR) – the total amount of receipts from the sale of all units of goods. If sold q units of goods by price p rub. per unit, then TR = q X R ;

– average income (AR) – income received per unit of products sold. Obviously, in conditions of perfect competition, average income equals the price of the goods sold.

Since marginal revenue (MR) is defined as the amount received from the sale of one additional unit of a good, we can conclude that in a perfectly competitive market, MR also equals the price of the good.

From the above it follows: if the behavior of an individual firm does not affect the price of the goods it sells, then for this firm the demand curve, the average income curve and the marginal income curve coincide. They represent the same horizontal line drawn at a level corresponding to the price of the product being sold. If under conditions of perfect competition the price equals marginal revenue, then for a profit-maximizing firm (based on universal rule 2) the price must equal marginal cost.

2.2. Monopolistic competition

The theory of monopolistic competition was developed in the works of the English economist J. Robinson and the American scientist E. Chamberlin. Monopolistic competition involves the combination of two models - perfect competition and pure monopoly. As with perfect competition, it is assumed that there are many firms in the industry and there is fairly free entry and exit. However (and this is a feature inherent in a monopoly) all firms in the industry have certain opportunities to modify the price of the goods they produce, since each firm sells a product that is significantly different from the goods produced by competitors. It would seem that all ready-to-wear companies produce the same product - men's suits. But this is not so - a separate company produces its own product (men's suit), which differs from the goods of other companies in style, quality of finishing, fabric used, fittings, etc. Product differentiation presupposes that each company has to some extent monopoly power over its product: it can raise or lower its price regardless of the actions of competitors. But this power is limited, of course, both by the presence of manufacturers of similar goods and by significant freedom of entry into the industry. All this leads to the fact that the demand curve of an individual firm in conditions of imperfect competition has a falling character, but smoother than the demand curve of the industry. Product differentiation, therefore, means that firms in an industry produce goods that are similar enough to be called the same product (men's suit), but also dissimilar enough (tailcoat, three-piece, etc.) so that the producer of each product has the opportunity change the price of your product.

Summarizing the above, it can be noted that the theory of monopolistic competition is based on three fundamental provisions:

1. The demand curve of an individual firm is downward sloping; its elasticity is higher than the elasticity of the industry demand curve because the market sells substitute goods produced by other firms. The falling nature of the demand curve provides the firm with the opportunity to earn monopoly profits in the short term.

2. There is freedom to enter and exit the industry. This circumstance leads to the fact that in the long run the economic profit of all firms in the industry becomes equal to zero. This will be clear if we look at the graphs in Fig. 1. If a firm receives monopoly economic profit (in Fig. 1, this is a shaded rectangle), then the exploitation of capital begins in the industry. The emergence of each new firm will lead to the fact that the market demand of buyers for a given product will begin to be distributed over an increasing number of firms, and the demand curve of an individual firm will move to the left (curve D 2 ). Finally, the moment will come, shown in Fig. 1, b, when the economic profit of the company becomes equal to zero and the entry of new firms will stop. Consequently, under conditions of monopolistic competition, the equilibrium of an individual firm in the industry in the long run occurs when the price of the goods sold (i.e., the average income) equals the average total costs (point IN, where is the curve D 2 touches the curve ATS).

a) b)

Fig 1. Equilibrium of a monopolist firm in the long run.

3. The industry includes a sufficient number of firms competing with each other, so that each individual firm pursues its own pricing policy, regardless of the reaction of competitors.

And one more interesting note: if we look at Fig. 1b, then we can see that, having achieved equilibrium at the point IN(in the long run), a firm operating in conditions of perfect competition would certainly increase its output to the level q s, since at point C it has minimal average total costs (i.e. at point WITH she would get the maximum profit). This means that under monopolistic competition, a wider range of goods is produced, but at higher costs per unit of goods than under perfect competition.

As practice shows, the third condition of monopolistic competition is often not met. In many US industries, for example, there are a small number (3 to 12) dominant firms that determine pricing policies. But at the same time, there are still a sufficient number of competitors in the industry, so the total demand curve of the dominant firms cannot be regarded as the industry demand curve. This market structure is called an “oligopoly,” and we will look at it below.

2.3. Oligopoly

Oligopoly is the predominant form of modern market structure. The term "oligopoly" is used in economics to describe a market in which there are several firms, some of which control a significant share of the market.

In an oligopolistic market, several large firms (from three to five) compete with each other, and the entry of new firms into this market is difficult. The products produced by firms can be either homogeneous or differentiated. Homogeneity prevails in the markets of raw materials and semi-finished products: ore, oil, steel, cement; differentiation – in consumer goods markets (cars).

The existence of an oligopoly is associated with restrictions on entry into a given market. One of them is the need for significant capital investments to create an enterprise in connection with the large-scale production of oligopolistic firms. Today it is generally accepted that an enterprise that produces at least 500 thousand can be effective. passenger cars per year, producing at least 2.5 million tons of steel, etc.

The small number of firms in an oligopolistic market forces these firms to use not only price but also non-price competition, since the latter is more effective under such conditions. Manufacturers know that if they lower prices, their competitors will do the same, resulting in falling profits. Therefore, instead of price competition, which is more effective in conditions of perfect competition, “oligopolises” use non-price methods of struggle: technical superiority, quality and reliability of the product, sales methods, the nature of the services provided and guarantees, differentiation of payment terms, advertising, economic espionage.

A characteristic feature of an oligopolistic market is the dependence of the behavior of each firm on the reaction and behavior of competitors. Large size and significant capital of firms are extremely immobile in the market, and in these conditions, the greatest benefits are promised precisely by the collusion between oligopolistic firms in order to maintain prices and maximize profits. Manufacturers negotiate and cooperate and enter into (sometimes open and even formalized) an agreement on dividing the market - a “cartel.” agreement".

A cartel is an agreement between several enterprises that establishes for all participants the volume of production, prices for goods, conditions for hiring labor, exchange of patents, delimitation of sales markets and the share (“quota”) of each participant in the total volume of production and sales. Its goal is to increase prices (above the competitive level), but not to limit the production and supply and marketing activities of participants.

At first glance, the similarities between a cartel and a monopoly are obvious. But a cartel, unlike a monopoly, very rarely controls the entire market, because it is forced to take into account the policies of non-cartelized enterprises. In addition, cartel participants have a fairly powerful temptation to deceive their partners by reducing prices or actively advertising their products, which creates conditions for capturing part of the market. As a result, many cartels are temporary market structures and are rare. In addition, the legislation of many countries considers cartel practice illegal and counteracts it with various methods.

A classic example of the formation and existence of a cartel agreement to this day is, for example, the Organization of Petroleum Exporting Countries (OPEC), which at different periods of its history controlled from 25% to 60°o of the oil production of industrial countries.

The inability to fully and constantly use the cartel for the interaction of oligopolistic firms forces them to conduct a secret economic policy in the field of price changes and delimitation of spheres of influence. Such cooperation can manifest itself both through the special economic policies of oligopolistic firms in the form of “price rigidity” or “pricing leadership”, and through special organizations such as “patent pools” (or consortia).

Price rigidity is the name given to the practice of oligopolistic firms when, even when costs or demand change, a particular firm is not inclined to change prices. She believes that if she has to raise her price, others will follow, causing her to lose market share. In this way, firms are deterred from changing prices for fear of starting a “price war.”

Price leadership means the practice when, when setting prices for its products, a company is guided by the prices set by the leader - most often a large company dominant in a given industry in a given market. This demonstrates a kind of hidden conspiracy, although its existence is usually not proven

Patent pools are an agreement on specialization and cooperation of production, and a consortium is an association of firms for the purpose of conducting common scientific research and joint construction of large investment projects. Both of these organizations perform cartel functions and are the basis for organizing a conspiracy to divide the market

An oligopoly is characterized by three characteristics:

– there are two or more competing firms in the industry, so the industry is not monopolized;

Each firm's demand curve is downward sloping, so the industry is not subject to free competition;

There is at least one large firm in the industry, any action of which causes a response from competitors, so it cannot be considered that there is monopolistic competition in the industry.

The main difference between a perfectly competitive market and an oligopolistic one is the peculiarities of price changes. If in a competitive market prices change continuously depending on fluctuations in supply and demand, then in an oligopoly prices change not so often, usually at certain intervals and by a significant amount. This price stickiness typically occurs when firms face cyclical and seasonal changes in demand. Such fluctuations in demand are taken into account in advance by oligopolistic firms, and the latter try not to change the price of the product, but to respond to changes in demand by increasing or decreasing the volume of goods produced. It is usually beneficial for a firm to change production volume rather than price in the event of demand fluctuations. Changing the price, as a rule, is associated with significant costs - you need to change and print new price lists, spend money on notifying customers, not to mention the loss of customer trust. Keeping prices at the same level is effective only when short term, it is not applicable for the long term.

The ability to maintain prices in the short term is inherent in the very structure of oligopolistic firms: by planning production, they prepare it in advance for possible drops or increases in demand. Typically, an oligopoly firm has a unique average variable cost curve (Figure 2). With such a curve AVC release of goods from the size q1 before q2 can be produced at the same level of variable costs. Over this interval, marginal costs also do not change and are equal to the average variables.

Rice. 2. AVC and MC curve under oligopoly conditions in the short term

As we know, according to the law of diminishing returns, if one of the factors of production (capital) remains unchanged (remember that we are considering a short-term period), then as additional units of the variable factor (labor) are introduced into production, average variable costs begin to fall. Then they reach their minimum, and if you do not stop attracting new units of labor, then AVC will begin to increase. But this is true if we consider capital as something indivisible. But let’s say a factory uses 25 machines, which are serviced by 50 workers per shift and produce the same product. The daily productivity of 25 machines is 100 units of goods, and the daily payment of one worker is 10 rubles. It is easy to calculate the value of average variable costs:

Let the daily demand for a product drop to 96 units. This means that the firm must reduce the number of workers it hires to 48 people.

But the company does not need to use 48 workers and 25 machines; it will reduce the number of operating machines to 24, and mothball one machine. Since there was a simultaneous change in both a constant and a variable factor, the law of diminishing returns does not apply in this case either

Thus, using divisible fixed factors of production, an oligopoly firm can, over a certain interval (Q1 – Q2) output to keep the ratio of working units of labor and capital unchanged. In this case, both average variables and marginal costs do not change.

How does an oligopoly firm behave in the short term? Typically, based on market research, firms determine their normal demand curve, which reflects how much of a product, on average, they can sell on the market at each price. Knowing potential demand, they install equipment based on expected variations. The “normal” demand curve is used to determine the initial “normal” price of the product (Fig. 3, a).

a) b)

Rice. 3. Prices remain constant when demand varies

Since any firm maximizes its profit at MR=MC, and the curves AVC And MS coincide that the corresponding price and volume values ​​are located at the point A intersections of curves M.R. And AVC. Price Рn –"normal price. It is also taken as a basis in case of changes in demand (curves D 1 And D2 in Fig. 3,b) does not change, but production volumes decrease (to q1) or increase (up to q2) .

It should be borne in mind that holding prices is advisable if, within certain limits of output, it is possible to keep average variable costs unchanged. When a firm has a classic U-shaped curve AVC, attempts to maintain the price and reduce production volume (when demand falls) will lead to losses.

To describe the actions of an oligopolist firm in the long run, it is necessary to know the response of competitors to a possible change in prices by the oligopolist. Since their actions cannot be determined, it has not yet been possible to create a unified theory of the behavior of an oligopoly firm in the long run.

Chapter 2. Monopoly: economic nature, reasons

occurrence, form

§ 1. The essence of monopoly

Monopoly – This is the absolute predominance in the economy of a single producer or seller of products 1. Such predominance provides the entrepreneurial firm (firms) or other business entities that have achieved a monopoly, i.e. monopolists, with the exclusive right to dispose of resources, the possibility of putting pressure on competitors, consumers and society as a whole, the possibility of obtaining excess profits and sustainable profits in general. A monopoly can arise as a product of natural or artificial monopoly.

In our literature, the term “monopoly” usually covers a wide range of economic structures, to denote which in the works of foreign economists the terms are used along with the word “monopoly” "oligopoly", "bilateral monopoly". A bilateral monopoly is the interaction of a single supplier or a joint buyer (this situation is possible in transport systems, energy, water, gas supply and other essential life support systems of society). Oligopoly is the presence of a few suppliers in the markets, the number of which can range from 2 (“duopoly”) until 7-8. Actually, “monopoly” is a rather rare phenomenon, if not unique. A typical phenomenon for the market economy of Western countries is the combination of oligopoly and small business, and over the past two decades this symbiosis has turned out to be the best form of expression of relations in many branches of heavy industry, primarily mechanical engineering, even covering the field of computer science.

Oligopolies, especially monopolies, can have different quantitative parameters. But, as a rule, they are formed on the basis of the concentration of capital and resources, so large corporations usually play this role.

The possibility of transition from an oligopoly or other non-monopoly structure to a monopoly itself always exists, which is due to the tendency of natural monopolism. This opportunity is realized through monopolistic practices and monopolization of the economy. However, in all countries with developed market economies, such actions are suppressed by various acts of the state, among which it is necessary to highlight competition legislation (or anti-monopoly legislation). The history of the development of market economies abroad indicates that the possibility of the emergence of monopolies, as a rule, is not realized.

In the United States, for example, large oligopolistic structures cover little more than 50% of the gross national product and less than 50% of employment. A similar picture is observed in Western European countries. This situation is typical for the modern scientific and technological development of these countries. Flexible and mobile small firms sometimes manage to adapt to changes in economic conditions faster and with fewer losses. The effect of production flexibility, which small and medium-sized firms are better suited to use, often provides bigger win than the effect of scale and concentration of resources. In addition, small firms are easier and more willing to take risks.

Along with this, there is also a tendency to strengthen direct horizontal and vertical relationships between oligopolies and small firms. Horizontal are connections between large corporations and small companies in the form of cooperation of firms producing homogeneous goods, or in the form of interaction of firms located at the same stage of the production process and performing different functions in the manufacture of the main product (for example, subcontractual cooperation of large corporations with small firms producing separate units, components of products, which are assembled at the factories of the parent corporation).

Vertical are connections between large corporations and small companies at different stages of the production process. A typical example of such connections is the relationship between large corporations engaged in processing raw materials and small firms supplying these raw materials, further processing of the main and by-products of corporations, waste disposal, auxiliary work, sales of products, as well as the development of the production of new goods. One of the most common forms of vertical relationships is the “franchising” system - the conclusion of a contract under which corporations transfer the right to sell their branded goods to small independent firms (dealers). This system covers almost half a million different enterprises in the United States with a total sales volume of over 200 billion dollars.

§ 2. International monopolies

An international monopoly is a large firm with assets abroad or an alliance of firms of different nationalities that establish dominance in one or more areas of the world economy in order to maximize profits. According to their forms, international monopolies are divided into two main groups: trusts and concerns based on common monopolistic property (transnational or multinational monopolies) and intercompany alliances (cartels and syndicates).

Transnational trusts and concerns – companies owned, controlled and managed by entrepreneurs in one country. They are international in their field of activity. Companies of this type already existed in the 19th century, but their activity truly became widespread in the middle of this century.

Unlike transnational monopolies, the owners multinational trusts and concerns are entrepreneurs from not one, but two or more countries. Their characteristic feature is the international dispersion of share capital and the multinational composition of the company's core.

§ 3. Monopolization of the economy

Monopolization of the economy – This is the process of firms seizing key positions in the production and sale of products, establishing their monopoly. Monopolization of the economy can be of natural or artificial origin.

The lowest forms of monopolization of the economy were temporary agreements on prices - their participants were obliged to sell their goods at uniform prices for a certain period (such agreements were called conventions, pools, rings).

Such agreements can still arise today. But the main forms of economic monopolization are cartels, syndicates, trusts and concerns. Cartel – This is an association of a number of enterprises in the same industry of production, in which its participants, while maintaining their ownership of the means and results of production, enter into long-term agreements with each other on establishing uniform prices, dividing markets according to consumers and products, etc. Syndicate – this is an association of enterprises in the same industry, in which ownership of the means of production is retained by the participants in the agreement, and the products produced are the property of the entire syndicate (i.e., the production independence of the syndicate participants is preserved, but their commercial independence is lost). Trust – This is an association of enterprises on the basis of establishing common ownership of the means of production. Concern – a corporation that arises on the basis of share capital (or the capital of a limited liability company) and unites formally independent enterprises under the auspices of a parent company (“holding”) by establishing financial control over them.

In the economic life of countries with a market economy, monopolization of the economy is associated with the acquisition of monopolies of market power, that is, the concentration in the hands of corporations of such a share of sales that allows them to impose their interests on society and other economic entities. In the USA, for example, the level of monopolization of production and sales of goods by one firm equal to 40% is considered as a concentration of real market power, and the level of monopolization equal to 60% is considered an expression of complete monopoly.

§ 4. Monopoly and competition

4.1. Balance "monopoly" - "competition"

When analyzing the mutual role of competition and monopoly-regulatory forces within highly concentrated oligopolistic markets, it is necessary to take into account their dual role. Competition embodies, first of all, a spontaneous-regulating (or, often said, self-regulating) principle in relation to a particular market. The forces of competition are directed towards maximizing the impact of all factors economic efficiency, but at the same time they are spontaneous in nature, therefore, they can and often do lead, especially in difficult conditions, from undivided dominance in the market to a number of severe - economic, social and other consequences. Monopoly-regulatory forces, in turn, are able, on the one hand, to limit the destructive influence of the spontaneous forces of competition and, in this sense, contribute to a more balanced development of the entire economy, its individual sectors and industries. On the other hand, such regulation in case of excessive restriction of competition, for example, price competition - based on collusions of leading producers, leads to stagnation, including the inhibition of scientific and technological progress and a decrease in production efficiency. Such negative processes manifest themselves most clearly under conditions of monopoly dominance in the industry by one or several manufacturers.

Therefore, the main goal of state policy in relation to individual industries and production markets is to maintain a balance of competitive and monopoly-regulatory forces within the oligopoly. At the same time, antimonopoly legislation is the main means of maintaining this balance by preventing excessive manifestation of monopolistic tendencies, i.e. as if maintaining the oligopoly mechanism in the “optimal mode”.

The basis of modern industrial legislation is the concept of antimonopoly regulation of sectoral industrial markets based on the “structure-behavior-functioning” approach.

Wherein:

Structure is the organization of production and distribution of a product, determining the content and forms of competition, namely, the number and size of sellers and buyers, freedom of entry and exit of supplier enterprises, the degree of development of the trade union movement in the industry, contractual and legislative relations connecting buyers and sellers (for example, through vertical or conglomerate integration).

Behavior is the competitive strategy prevailing in an industry and the specific tactics of enterprises in the areas of pricing, product development, advertising, innovation, and investment.

Operation is the goals and results of enterprise activities, namely, the pursuit of technical and allocative efficiency, technological progress, availability of goods, creeping employment, efficient use of resources, etc.

The monopoly-competition balance has changed markedly in antitrust legislation throughout the 20th century. The analysis involves all factors for increasing production efficiency: economies of scale in production and economies of scale in the scope of activity, savings in transaction costs associated with the implementation of transactions, agreements, contracts and, finally, competitive pressure itself associated with competition for market share and for obtaining the maximum arrived. Monopoly has ceased to be identified with increased concentration of production; in a number of cases, monopoly has received a “theoretical sanction” for existence, especially when the associated increase in efficiency covers the costs of decreased competition. More and more attention is being paid to defining the economic category of monopoly market power, the boundaries of product and geographic markets, methods of price and non-price competition, etc. Industry competition and the intensity of competition in the industry market are viewed through the methodological prism of the interaction of a number of factors. In particular, M. Porter identifies five main factors or “forces” that determine the state of competition and the level of profitability in the industry.

The significance of this model is that, based on general theoretical approaches within the framework imperfect competition The analysis involves a complex set of purely economic and psychological factors that determine the strength of competitive pressure on the industry market, namely: real competition within the industry, potential competition from new aggressor firms (potential price competition) and from substitute goods and services (non-price competition). potential competition), the impact of suppliers and buyers. From this general approach follows a whole train of new practical measures of antimonopoly regulation of the economy, which deserve special study in a separate report. For the purposes of this paragraph, it is important to note that both real and potential competition coexist on equal terms in theoretical basis modern antimonopoly legislation, and that the concept of “concentration” is not automatically associated with the concept of “monopoly”.

This is not surprising, given that in developed countries highly concentrated oligopolistic markets with a relatively small number of producers predominate.

In Western economic theory, it is believed that when the share of the four largest enterprises in an industry reaches 40% (CR-4>40%), oligopolistic price collusion becomes probable. It is in this regard that the principle of antimonopoly legislation was formed as such a basis, according to which the sign of a monopoly is not large size. the company itself, and not even the large size of the controlled market, but the presence of monopolistic intentions and sufficient market power to implement these intentions. The most radical punishment in connection with accusations of monopolization is the dissolution of companies. But such decisions are rarely made. there were about three dozen of them, and only 7 of them were taken for the 1950s - 70s.

The analysis presented above indicates the need for a certain caution regarding the possibilities of practical use of Western antimonopoly legislation in our conditions. This legislation is designed for the already existing plurality of producers who have formed an oligopoly. It is for this reason that antimonopoly legislation usually does not apply to those industries in which an oligopolistic structure does not develop stably (agriculture), or, vice versa. unity is a mandatory basis for their production organization (transport, production and distribution of electricity, etc.).

As for most other industries, the preliminary conclusion that can follow from the above data is related to the fact that the main way to strengthen the competitive component in the economic behavior of Russian enterprises may, apparently, be not the deconcentration of production and the disaggregation of enterprises, but the strengthening of foreign competition, for which it is necessary to create adequate conditions: convertibility of the ruble, targeted regulation of tariff barriers to entry into industries, striking an optimal balance between the consolidation of enterprises, allowing for economies of scale, and increased competition based on an increase in the number of rival and independent producers. Thus, it can be assumed that the parallel implementation of measures to privatize the Russian economy to open it to external competition will make it possible to radically restructure its inherent structure of property rights without the prohibitive costs associated with the negative consequences of monopoly.

At the same time, it is obvious that a number of industries may not be able to withstand the competition of foreign producers, at least during some period of necessary adaptation. Ignoring the minimum duration of such an adaptation period will inevitably lead to the disintegration of industry and will mean deindustrialization of the national economy, accompanied by unemployment and the destruction of industrial potential. In these cases, most economists usually recommend the use by the state of antimonopoly measures of a different order, namely: 1) the creation of parallel similar industries; 2) use as a means of overcoming monopolistic tendencies of import of similar goods; 3) careful deconcentration of production, disaggregation of some giant enterprises; 4) the use of methods of direct and indirect state control over income, profitability levels, wages, and partly over the distribution of manufactured products.

4.2. Monopolistic practice

Monopolistic practice – these are actions of economic entities during which their dominant position in the economy (market power) is realized, or these are actions aimed at monopolization of the economy. There are different varieties of this practice.

State monopolistic practices carried out by central government bodies and includes the state nationalization of profitable business firms, the creation of new joint stock companies with the retention of a controlling stake in the hands of government bodies (such companies are outwardly independent, but in fact their dependence on the state is much greater than under the administrative-command system), the forced imposition of government tasks on business firms, the directive distribution of goods and the forced imposition of partners in economic relations, state directive planning of the production and sale of goods, state directive setting of prices for goods produced by entrepreneurial firms based on non-state capital, imposition of bans on forms and objects of trade. In the past, state monopolistic practices were of predominant importance in Russia, almost completely covering both internal and external economic relations.

Departmental monopolistic practice(i.e., the corresponding practice of line ministries) has similar forms of manifestation only on the scale of not the national economy as a whole, but its individual branches. This practice was in the past the basis of the so-called. “departmentalism” and “departmental disunity in national economy", restraining both economic initiative from below and rational regulation of the economy from above. Currently, there is a desire by a number of departments to maintain this practice, taking advantage of the imperfections of the legislation on joint stock companies and securities. Ministries are trying to seize controlling stakes in subordinate enterprises. If this becomes widespread, departmental monopolistic practices will continue in our national economy, significantly limiting the possibilities for the development of competition and the spread of market relations.

Monopolistic practices of entrepreneurial firms includes the imposition of discriminatory contract terms on partners, including imposing on them the obligations of exclusive purchase and sale with a given business firm and the imposition of contract terms that are not related to the subject of this contract; withdrawal of goods from circulation, as well as cessation of production of goods for which there is a need, in order to create an artificial shortage; collusion between firms to prevent potential competitors from entering the market; imposing a forced assortment on buyers as a condition for selling goods, dumping, etc. An objective reader will easily detect all of the above forms of monopolistic practice - from the so-called. “forced assortment” to the systematic destruction of goods in meat processing plants and refrigerators to increase demand.

Chapter 3. Economic consequences of monopoly.

Antimonopoly regulation

§ 1. History of antimonopoly regulation

The most important means of regulating the activities of monopolies is antimonopoly legislation, the foundations of which are laid in the legislative acts of the Supreme Council of the Russian Federation.

Antimonopoly legislation is a package of laws that acts as a means for the state to maintain a balance between competition and monopoly, as a means of establishing official “rules of the game” in the market.

Antitrust legislation began in the USA and Canada, which was a reaction to the strengthening of the power of monopoly unions in the economy. In 1880, the first law was adopted - the Sherman Act, which prohibited monopolization of the market and declared illegal any associations and conspiracies aimed at restricting production and trade. Later, in 1914, another important legislative act- Clayton's law. This law was aimed primarily against various types of monopolistic practices. It outlawed price discrimination, prohibited exclusive or “forced” agreements, the formation of interlocking directorates, and the acquisition of shares in competing corporations. In 1914, the Federal Trade Commission was formed to combat anticompetitive mergers. In 1938, this commission was given the additional responsibility of protecting the public from misleading or false advertising. The Zeller-Kefauver Act of 1950 added to the Clayton Merger Act by prohibiting mergers through acquisitions that could result in less competition.

The first antitrust laws in the United States were an attempt to fight against large production for the survival of small ones. Subsequently, the practice of antimonopoly legislation changed repeatedly throughout the 20th century, periods of its tightening and liberalization alternated.

In recent decades, there has been a softening of the provisions of legislation. This showed the influence of representatives of the Chicago school. In their opinion, the main task of antimonopoly legislation is not to protect the interests of individual companies, but to prevent the deterioration of competition conditions.

IN Western Europe Antimonopoly legislation was adopted in the post-war period and has a number of features. On the one hand, it is formally aimed at protecting the interests of consumers, and on the other, it is designed to encourage the process of concentration of production and the formation of large corporations, if this is related to scientific and technological progress.

Although the specific nature and content of antitrust legislation in different countries have their own characteristics, it is possible to identify the basic principles of this legislation that are common to all countries: protection and promotion of competition, control over firms occupying a dominant position in the market, price control, protection of consumer interests, protection of interests and promoting the development of medium and small businesses.

Modern antimonopoly legislation has two fundamental directions - price control and control over company mergers. Antitrust laws primarily prohibit price agreements. Any collusion between firms to fix prices is illegal. The law also prosecutes dumping sales practices, when a company deliberately sets lower prices in order to force competitors out of the industry. For example, in the case against IBM, the US Department of Justice accused the company of dumping when setting rental prices for its own computers.

A business merger occurs when one firm acquires shares of another. As a result, the second company becomes an integral part of the first. Since the second half of the 80s. the intensification of this process is observed in almost all countries. Thus, in the USA in 1987, more than 2000 firms were absorbed through mergers.

The government usually takes action when a horizontal merger (combination of similar companies) of firms results in a significant increase in their market share. An exception may be made when one of the firms is on the verge of bankruptcy.

In the case of a vertical merger (the combination of sequentially related industries such as coal, steel and automobile companies), the law also sets an upper limit on the share of firms in the relevant markets. After all, the merger of former suppliers and consumers makes it impossible for other firms to sell their goods to the buyer company.

Conglomerate mergers (combinations of companies from different industries) are generally permitted. If an oil company or an insurance company acquires an ice cream company, their positions in their respective markets remain virtually unchanged as a result.

§ 2. Monopolistic actions and restrictions

competition: qualification issues

The formation of a civilized market in Russia is unthinkable without the development of competition. It is this that is the incentive to further improve production, improve product quality, reduce prices, and ultimately, increase the living standards of the population. To ensure normal competition in countries with market economies, antimonopoly legislation has been created. A similar process is happening in our country.

Article 178 of the Criminal Code of the Russian Federation establishes liability for monopolistic actions and restriction of competition. However, when applying it in practice, many questions arise.

First of all, the possibility of applying criminal legal measures has been overly expanded. The list of acts that contradict the requirements of antimonopoly legislation is contained in Articles 6-10 of the Law of the Russian Federation “On Competition and Restriction of Monopolistic Activities in Product Markets” (hereinafter referred to as the Law), and the vast majority of them fall under the elements of a crime provided for in Article 178 Criminal Code of the Russian Federation. For example, the introduction of restrictions on the creation of new business entities in any field of activity, as well as prohibitions on the implementation of certain types of activities or the production of certain types of goods, except for cases established by the legislation of the Russian Federation, unjustified obstruction of the activities of business entities in any field , a ban on the sale (purchase, exchange, acquisition) of goods from one region of the Russian Federation (republic, territory, region, district, city, district within a city) to another, restriction of the rights of business entities to sell (purchase, purchase, exchange) goods, creating obstacles to market access (exit from the market) for other economic entities. All this is nothing more than a restriction of competition (Part 1 of Article 178 of the Criminal Code of the Russian Federation).

The establishment of monopoly high (low) prices, the division of the market on a territorial principle, by the volume of sales or purchases, by the range of goods sold, or by the circle of sellers or buyers (customers) are reproduced in the disposition of Part 1 of Article 178 of the Criminal Code of the Russian Federation.

In addition, a number of actions specified in the Law as violations of antimonopoly legislation are directly related to crimes. Thus, the withdrawal of goods from circulation, the purpose or result of which is the creation or maintenance of a shortage in the market or an increase in prices (paragraph 1, paragraph 1, article 5 of the Law), is most often associated with the establishment of monopoly high prices; imposing contract terms on the counterparty that are unfavorable for him or not related to the subject of the contract, unreasonable demands for the transfer of financial assets, other property, property rights, labor force of the counterparty, etc. (paragraph 2, clause 1, article 5 of the Law) are one of the forms restrictions on market access. This approach of the legislator imposes on law enforcement agencies the obligation to resort to criminal prosecution in most cases of violation of antimonopoly legislation, which is hardly justified.

For example, on the instructions of the head of one of the departments railway, which occupies a dominant position in the railway transportation market, diesel locomotives not under the jurisdiction of the Ministry of Railways were prohibited from entering public tracks.

Employees of the city administration and the regional department of the Russian transport inspection limited the independence of business entities that provided passenger transportation services, conditioning the approval of the passport of the named route and the extension of the license for passenger transportation by road on the entry of business entities into the union of enterprises and entrepreneurs of road transport. Through this formation, the city administration had the opportunity to regulate prices for the services provided. The described acts form a crime under Part 1 of Article 178 of the Criminal Code of the Russian Federation.

It is generally accepted that the criminalization of an act is appropriate when there is not and cannot be a norm that effectively regulates the relevant relations using the methods of other branches of law (civil, labor or administrative).

It seems advisable to use criminal legal measures in the fight only against the most dangerous types of violations of antimonopoly legislation that cause significant harm to protected interests. To do this, we propose to introduce the sign “causing significant harm” into the construction of the objective side of the analyzed crime.

The result of committing this crime, as a rule, is harm caused to business entities. Thus, in one of the regions, mandatory paid confirmation of a certificate for products imported into the region, import quotas, and an increased fee for enterprises selling imported products were introduced. As a result, each of the three companies selling goods produced in another region suffered damage in excess of 50 million rubles.

Consumers are often harmed as well. In one of the large industrial cities there is a market funeral services was divided between municipal enterprises. The creation of new enterprises was hampered by representatives of the local administration who carried out registration. This allowed municipal enterprises to increase prices uncontrollably.

Due to the fact that the crimes in question are committed in the sphere of economic activity, i.e. in the sphere of production, distribution, exchange and consumption of material goods, the consequences of their implementation must be material in nature. Causing non-property damage should entail the application of civil law measures.

Material consequences can be in the form of direct damage, as well as lost profits (failure to receive what is due).

Of particular interest are cases of violation of antimonopoly legislation by officials of government and administrative bodies. In practice, difficult questions arise: how to qualify the actions of deputies of representative bodies in the event of the publication of a legal act that restricts access to the market for economic entities? how to evaluate the actions of officials fulfilling the requirements of an illegal legal act issued by the authorities state power?

Violations of antimonopoly legislation by representative government bodies and bodies local government became widespread with the expansion of the powers of the latter. Most often, deputies at various levels adopt regulations prohibiting the import of various goods into the territory of a certain region, establishing illegal requirements for producers from other regions to obtain licenses and to pay taxes and fees.

Such acts are adopted collectively. But at the same time, their essence is the restriction of competition with signs of a crime provided for in Part 1 of Article 178 of the Criminal Code of the Russian Federation. In this case, all members of the deputy corps who voted for such a decision will have to be recognized as the subject of the crime. However, if the vote was held secretly, there is reason to believe that the culprits will not be found.

The adoption of illegal decisions by representative and executive bodies only creates preconditions for limiting competition. In reality, the rights of business entities are violated as a result of the actions of officials who carry them out (executors). For example, the regional administration issued a decree obliging vehicle owners to carry out anti-theft markings at a specific enterprise, and in the absence of such markings, vehicles were not allowed to undergo an annual technical inspection. In the described case, real harm was caused by the actions of traffic police officers.

And lastly, it is unclear whether additional qualification of actions of officials who violate the requirements of antimonopoly legislation is required according to the provisions of Chapter 30 of the Criminal Code of the Russian Federation. Thus, the head of the regional administration issued a decree according to which one of the joint-stock companies was given the exclusive right to trade in alcoholic beverages during business hours from 19.00 to 23.00. Since there is no indication of a special subject of a crime in Part 1 of Article 178 of the Criminal Code of the Russian Federation, the act, if there are other signs, is subject to additional qualification according to the standards establishing liability for official crimes.

§ 3. Antimonopoly and competition policy in

Russian Federation

Currently, the importance of antimonopoly and competition policy is increasing as one of the key areas of activity to overcome the crisis and reform the Russian economy, as noted in the Constitution of the Russian Federation, the Address of the President of the Russian Federation to the Federal Assembly and the medium-term program of the government of the Russian Federation "Reforms and development of the Russian economy in 1995 -1997".

Antimonopoly and competition policy, along with traditional directions for preventing and suppressing monopolistic activities, will largely concentrate on encouraging the development of market competition between business entities, as well as on organizing state regulation and control of the activities of monopolistic enterprises, including natural monopolies.

The implementation of these tasks will be carried out in the following main areas.

Development and implementation of the State Program for Demonopolization of the Economy and Development of Competition in the Markets of the Russian Federation and relevant industry and regional programs;

Implementation of antimonopoly control in order to prevent and suppress abuse of the dominant position of economic entities in commodity markets; identification and suppression of anti-competitive agreements between business entities, control over mergers and acquisitions; carrying out state antimonopoly preventive control during the second stage of privatization, as well as during the reorganization of enterprises,

Preventing the creation or maintenance of more favorable operating conditions for individual business entities in industries and product markets, including through the unjustified provision of benefits, assignment of various types of exclusive rights in terms of access to a certain market, etc.; development of the Law “On State Aid”, adopted in many European countries,

Development of a balanced export-import policy, including a policy of moderate government protectionism, determined by the level of competitiveness of domestic enterprises and the conditions for the Russian Federation to join the World Trade Organization as a full member;

Carrying out a special policy regarding natural monopolies on the basis of relevant legislation;

Identification and suppression of illegal actions of state bodies and local governments that lead to restriction or disruption of competition;

Reducing barriers to entry into markets for new business entities, eliminating administrative regional barriers that impede the normal development of competition;

Further development and implementation of state policy to support entrepreneurship, including mallow enterprises;

Protection of entrepreneurs from criminal attacks and abuses by officials;

Implementation of state consumer policy as the most important form of preventing and suppressing unfair competition, including in the field of advertising activities.

The practice of applying legislation regulating the development of competition, preventing and suppressing monopolistic activities has shown that the necessary foundations have now been laid for solving these problems. It is necessary to significantly expand the legal framework for the effective implementation of state competition policy.

The development of legislation regulating the processes of demonopolization and maintaining fair competition in the financial sector has become urgent. The processes of mergers and acquisitions of banks require legislative regulation based on the development of special laws on bank mergers and bank holding companies.

An important area of ​​activity of antimonopoly authorities is the development of regulatory documents necessary for the implementation of the laws “On Natural Monopolies” and “On Advertising”.

It is necessary to regulate on the part of the antimonopoly authorities the processes of accumulation in the hands of individual investors of control over the majority of enterprises in one industry, that is, to prevent the creation of new private monopoly structures or the strengthening of existing monopolism. In particular, in the legislative regulation of issues of attracting foreign investment rules must be provided to prevent the purchase of competing Russian enterprises with their subsequent closure and privatization of sales channels solely in the interests of foreign competitors. At the same time, measures should also be provided to help maintain a certain level of employment in the country.

A significant role is given to legislation regulating competition in the process of exchange activities and organized trading. Here it is important to ensure, including at the legislative level, competition, openness and publicity of their conduct. It is necessary to develop a regulatory framework for the development of futures and options transactions in exchange trading with a system of necessary guarantees for such trading.

It should be emphasized that the effectiveness of competitive and antimonopoly policy largely depends on the coordination of actions of federal executive authorities, including when developing privatization programs, state investment, customs tariff, structural, financial policies and many other issues that determine the nature and pace of reforms.

Conclusion

In conclusion, it is necessary to draw some general conclusions from the study of competition as a diverse economic category.

She may be intra-industry(between similar products) and intersectoral(between products of different industries).

It can be price or non-price. Price involves selling goods and services at prices that are lower than those of a competitor. A price reduction is possible either by reducing costs or by reducing profits, which only large firms can afford.

Non-price competition is based on the sale of products of higher quality and reliability achieved through technical superiority.

Depending on how participants in market relations compete with each other, a distinction is made between perfect (free) and imperfect competition and the corresponding markets: a free competition market and an imperfect competition market,

The less influence of individual firms on the price of products, the more competitive the market is considered.

PERFECT COMPETITION (free competition market) is an ideal image of competition in which numerous sellers and buyers with equal opportunities and rights act independently of each other in the market.

The main feature of perfect competition: none of the firms influences retail price, because the share of each of them in the total output is insignificant.

Full perfect competition is unattainable. You can only approach it. With a certain degree of convention, competition that existed until about the middle of the 19th century can be considered free.

From the second half of the 19th century. under the influence of scientific and technical progress, there is a rapid process of concentration of production, which leads to the formation of large and super-large enterprises, i.e. monopolies.

A monopoly (Greek: monos - one, poleo - sell) arises when an individual manufacturer occupies a dominant position and controls the market for a given product.

THE GOAL OF A MONOPOLY IS TO OBTAIN THE MAXIMUM INCOME POSSIBLE THROUGH CONTROL OVER PRICE OR PRODUCTION VOLUME IN THE MARKET. THE MEANS OF ACHIEVING THE GOAL IS A MONOPOLY PRICE WHICH PROVIDES ABOVE NORMAL PROFIT.

Monopolies are formed by the merger of several companies and have the following organizational FORMS:

Cartel - an agreement on a quota (quantity) of products and division of sales markets.

Syndicate is an association for the purpose of organizing joint sales of products.

A trust is a monopoly in which ownership, production, and sales of products of its member firms are combined.

The concern is a monopoly with a single financial center for all its member firms in different industries, but with a common technology.

Conglomerate - associations based on the penetration of large corporations into industries that do not have production and technological connections with the field of activity of the parent company.

The emergence of monopolies makes competition imperfect (imperfectly competitive market).

UNDER IMPERFECT COMPETITION IT IS A MARKET IN WHICH AT LEAST ONE OF THE CONDITIONS OF FREE COMPETITION IS NOT MEETED.

Imperfect competition is divided into three types: monopolistic competition, oligopoly, and pure monopoly.

1. Under monopolistic competition, the market continues to remain a large number of sellers and buyers. But a new phenomenon arises - product differentiation, those. the product has properties that distinguish it from similar competitors’ products. Such properties are: high quality product, beautiful packaging, good sales conditions, favorable store location, high level of service, etc.

Having such advantages, the owner of a differentiated product becomes a monopolist to a certain extent and gains the ability to influence the price. But since the sales volume of each seller is relatively small, there are quite a lot of monopolistic firms and each of them has limited control over the market price - this is a distinctive feature of monopolistic competition.

2. Oligopolistic competition is represented by a market dominated by a few firms (Greek: oligos - few, poleo – sell). It is characterized by the presence of either homogeneous or differentiated products, and The main feature is pricing based on the principle of leadership.

This principle assumes that most firms tend to charge approximately the same price as the strongest firm in the market.

The opposite of oligopoly is oligopsony, when there are several sellers in the market, not buyers.

3. A pure monopoly exists in the market if there is only one seller who has no competitors. Its peculiarity is that the seller can change the price within very wide limits, and the highest possible price is limited only by effective demand.

It happens that there is only one buyer in the market. This phenomenon is called monopsony(I'm buying one).

THE ROLE OF MONOPOLY in the economy is twofold.

The positive side is that the products of monopolistic companies are usually of high quality, and large-scale production allows them to reduce costs and save resources.

The negative effect is that the monopoly, dominating the market and having large profits due to the monopoly high price, limits production. In addition, in conditions where there is no competition, the monopoly loses the incentive to increase efficiency through technological progress.

Taking this into account, the state is trying to resist monopolism by encouraging competition. The most important means for this is antimonopoly legislation, i.e. a package of laws that is a means for the state to maintain a balance between competition and monopoly.

List of sources used

Regulatory acts

1. Law of the Russian Federation “On Natural Monopolies”

2. Law of the Russian Federation “On Competition and Restriction of Monopolistic Activities in Product Markets”

4. Constitution of the Russian Federation 1993

5. Criminal Code of the Russian Federation

Periodicals

1. A. Gorodetsky, Y. Pavlenko, A. Frenkel. Demonopolization and development of competition in Russian economy//Economy Issues. – 1995. – No. 5. - With. 48-57.

2. Antimonopoly and competition policy as an integral part of the concept of economic development of the Russian Federation in 1995-1997. // Economic Issues. – 1995. – No. 11. - With. 87-88.

3. Varlamova A.N. On some problems of competition law // Moscow University Bulletin. – Series 1. – Law. – 1997. – No. 1.

4. Gordeychik S. Andreev A. // Russian justice. – 1998. – No. 7.

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Tolkachev. C. Imperfect competition. // Russian Economic Journal. 1993. N.5.

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Antimonopoly and competition policy as an integral part of the concept of economic development of the Russian Federation in 1995-1997. // Economic Issues. – 1995. – No. 11. - With. 87-88.

Option 1.

A) Eastern countries are characterized by dominance industrial society.

B) monopolies led to weakening competition

C) at the end of the 19th and beginning of the 20th centuries, countries developed evenly.

D) at the beginning of the 20th century, the state left workers socially unprotected.

D) France was called “the workshop of the world and the world’s driver.”

E) radicals - supporters of compromises.

G) Japan is the only country in the East that has carried out modernization.

H) France, Germany and Austria-Hungary were monarchies at the beginning of the 20th century.

I) The Paris Commune destroyed private property.

A

b

V

G

d

e

and

h

And

2. Human dependence on nature is characteristic of :

a) traditional society

b) modernized

c) industrial

3.The Industrial Revolution began in countries in the following sequence:

A) France, England, Germany

b) England, France, Germany

c) Germany, France, England

4.As a result of the industrial revolution:

A) the proletariat and peasantry appear

b) the formation of the world market is completed

c) the standard of living of the population is decreasing

5.Ford, Edison and Marconi were:

a) artists

b) politicians

c) inventors

a) the emergence of factories

b) creation of monopolies

c) revival of workshops

7.The reason for the rapid development of natural sciences in the 19th century was:

b) industrial development

8.The revolution of 1848-49 contributed to:

a) establishment in the countries of the republic

b) completion of the unification of countries

c) the elimination of feudal duties

9.Before other events: a) the unification of Italy was completed

b) the German Empire arose

c) 2nd empire was formed in France

10.Under the slogan “Live working or die fighting!” performed:

a) Lyon weavers in France

b) members of the Union of Communists

c) abolitionists in the USA.

11.The new course of T. Roosevelt and O. Bismarck included:

b) anti-democratic measures

c) destruction of trusts

12.National revolutions in Latin America led to:

a) the creation of a single state on the continent

b) the appearance independent states

C) the elimination of feudal remnants

13.Continue the logical series: cartels, syndicates,……..concerns.

14.

1. X-ray V.

2.D.Maxwell

3. Curie P.

4. Koch R.

A) discovery of X-rays,

b) creation of a vaccine against tuberculosis

c) creation of the theory of light

d) discovery of radioactivity

15. Match and write the answer in the table.

Conservatism

Liberalism

Socialism

16 Features of traditional society in the East. Choose several correct answers:

A) the dominance of private property b) the omnipotence of the state c) society is divided into closed groups d) the individual depends on the social group e) the supreme owner of the land is the state

Certification material for intermediate certification

in the 2014 – 2015 academic year in history in 8th grade

Option 2.

1. Are the judgments correct? Write your answer in the table. (Not really)

A) The countries of Western civilization are characterized by the dominance of traditional society.

B) the formation of monopolies contributed to the development of the market.

C) Marxists are supporters of compromises.

D) many countries of the East have turned into raw materials appendages of the metropolises

D) at the beginning of the 20th century, social protection of workers increased.

E) in the late 19th and early 20th centuries, countries developed unevenly.

G) in the course of reforms and revolutions, France becomes a democratic state by the end of the 19th century

H) India is the only country in the East that has carried out modernization.

I)) The USA was called “the workshop of the world and the world’s driver.”

A

b

V

G

d

e

and

h

And

2 . A society in which commodity relations predominate is called: a) feudal b) industrial c) agrarian.

3.The Industrial Revolution began in countries in the following sequence:

A) France, England, Germany

b) England, France, Germany

c) Germany, France, England

4.The result of modernization is :

a) renewal of all aspects of life

b) transition from industrial society to traditional society

c) creation of huge colonies

5. D. Stephenson, K. Benz, F. Zeppelin were :

a) writers

b) inventors

c) politicians

6. A new feature in the development of capitalism in the 2nd half of the 19th century:

a) the emergence of factories

b) creation of monopolies

c) revival of workshops

7. The reason for the rapid development of natural sciences in the 19th century was:

a) an increase in the number of church schools

b) industrial development

c) adoption of laws on compulsory secondary education

8.As a result of the Napoleonic wars in Europe:

a) the power of the nobles is restored

b) feudal orders are destroyed

c) old dynasties are returning

9. General cause of revolutions in 1848-49:

a) political fragmentation

b) foreign oppression

c) deterioration of the situation of the people

10. It happened later than others :

a) unification of Italy

b) the North German Confederation was formed

c) the German Empire arose

11. Charter, W. Lovett, petition refers to :

a) Paris Commune

b) the Chartist movement in England

c) revolution of 1848 in France

12.The new course of T. Roosevelt and O. Bismarck included:

a) carrying out social reforms

b) anti-democratic measures

c) destruction of trusts

13.Continue the logical series: cartels, syndicates,……..concerns.

14.Make a match and write the answer in the table.

1.H. Darwin

2.M. Faraday

3. N. Bor

4. L. Pasteur

A) the discovery of electromagnetism b) the discovery of the theory of evolution c) the creation of a theory about the structure of the atomic nucleus d) the creation of microbiology

15.Make a match and write the answer in the table.

Conservatism

Liberalism

Socialism

A) free market b) commitment to what has stood the test of time c) the establishment of universal equality d) the preservation of class differences e) the elimination of private property f) the evolutionary development of society.

16.Features of a modernized society. Choose several correct answers:

a) independence of the individual b) the dominance of market relations c) the dominance of state property d) the rule of law, the presence of rights and freedoms

e) division of society into classes

Answers to the test. IN 1

1. no, yes, no, no, no, no, yes, no, yes.

2.a

3.b

4.b

5.c

6.b

7.b

8.c

9.c

10.a

11.a

12.b

13.trusts

14.1-a, 2-c, 3-d,4-b

15.K-b,g

L-a,e

N-v,d

16.b c d e

Answers to the test. AT 2

1. no, yes, no, yes, yes, yes, yes, no, no.

2.b

3.b

4.a

5 B

6.b

7.b

8.b

9.c

10.v

11.b

12.a

13.trusts

14.1-b,2-a, 3-c,4-d

15. K-b,g

L-a,e

N-v,d

16.a b d d

Competition and its forms. Antimonopoly activities of the state

Competition and its forms. Competition (from the Latin concurere - I encounter), as already noted, is one of the driving forces of development of the economic system. How economic category- this is the struggle between commodity producers for the most favorable conditions for the production and sale of goods and services, for the appropriation of the greatest profits.

Competition is an objective economic law of developed commodity production, expressing internally necessary, stable and essential connections between isolated commodity producers, on the one hand, and consumers of their products, on the other, as a result of which entrepreneurs are forced to reduce production costs, improve the quality of goods and services, etc. Its action for commodity producers is an external coercive force for increasing labor productivity at their enterprises, expanding the scale of production, accelerating scientific and technical progress, and introducing new forms of production organization and wage systems.

It is no coincidence that I. Schumpeter defined competition as the rivalry between the old and the new, which represents one of the forms of development of contradiction as a category of dialectics.

The law of competition and each of its forms of movement are permeated with internal contradictions, which, in turn, are the source of economic progress. The most important of them include contradictions between: 1) small and medium-sized enterprises for the most favorable conditions for production and sales of products; 2) large companies who set themselves similar goals; 3) enterprises of monopolized and non-monopolized sectors of the economy with their inherent needs and interests; 4) enterprises of the monopolized and state sectors of the economy; 5) enterprises-producers and enterprises-consumers; 6) supply of producers and demand of consumers; 7) consumer enterprises; 8) different categories and segments of the population and within them for the opportunity to purchase high-quality goods and services at minimal prices.

At the beginning of the 16th - end of the 19th century. Free competition in intra-industry and inter-industry forms reigned between the owners of small enterprises that produced goods for an unknown market. Free competition led to the development of concentration and centralization of production and capital and at a certain stage (the last third of the 19th century) led to the emergence of monopolies.

On modern stage competition arises, first of all, between giant associations and within them, as well as between enterprises in the non-monopolized sector of the economy and different forms of ownership. Industries dominated by purely monopolistic competition are the production of household appliances and electronics, outerwear, etc. Oligopolistic competition dominates in the automotive and a number of other industries. Its peculiarity lies in the fact that the center of the struggle is increasingly moving from the sphere of circulation to the sphere of production, from sectoral to intersectoral, from national to international levels.

Methods of competition include improving the quality of goods and services, quickly updating the product range, design, providing guarantees and after-sales services, temporarily reducing prices, improving payment terms, etc. Such “peaceful” methods of limiting competition are also used, such as the conclusion by concerns of secret agreements on a common policy. According to the American economist M. Porter, enterprises compete using three main methods: 1) selling goods at a lower price than their competitors; 2) producing goods with higher quality characteristics and special properties that satisfy the needs of a narrow circle of consumers (deep specialization of production).

Being an integral part economic mechanism, competition operates through demand, supply and prices. In this case, it occurs both between producers and between consumers (buyers).

As the economic system evolves, competition also changes. At first, free (or pure, perfect) competition prevailed, which was characterized by a large number of competing producers and competing buyers, and free access of commodity producers to any type of activity. Under these conditions, the pricing process was carried out as a result of the free (without any restrictions) and spontaneous interaction of demand, supply and price, that is, due to self-regulation of the economic system. Manufacturers focused on meeting the needs of consumers. The ideal model in this scheme was a situation where the consumer is always right, his discrimination is completely excluded, which means the establishment of a kind of dictate of the consumer over the seller.

In free (or perfect) competition, no firm can influence the market price. To a certain extent, such requirements in modern conditions are met by markets for agricultural products and services. Over a long period of time, their prices tend to correspond to socially necessary production costs.

A type of free competition is pure competition between many sellers and buyers regarding the sale and purchase of homogeneous goods, in which there is no product differentiation (for example, competition in the flour market).

Under capitalism, free competition manifests itself in the competition both between various forms of private capital (industrial, commercial, banking, etc.), and within each of them. Such competition takes the form of intra-industry and inter-industry.

As a result social division labor production of goods and provision of services is carried out at enterprises of certain industries. For example, in the USA there are about 700 of them in industry, and the number of products produced reaches 1 billion items. Intra-industry competition is the struggle between commodity producers operating in the same industry. Due to the different level of technology, production organization and labor intensity, each of them sets individual working hours for the production of a certain type of product, and therefore an individual production cost. But prices on the market, as already noted when considering the cost of goods, are determined by costs that are set at enterprises that manufacture the vast majority of products. Therefore, the result of intra-industry competition is the transformation of individual individual production costs, individual values ​​into a single market, or social value.

Intra-industry competition helps reduce production costs, introduce scientific and technological achievements, and stimulates the process of concentration of production and capital. In modern conditions, it exists mainly in certain highly specialized markets for specific types of goods (for example, in the market for minicomputers, televisions, cars, etc.)

Intersectoral competition is competition between commodity producers operating in different sectors of the national economy. Due to different production conditions in industries, entrepreneurs with the same capital expenditure receive an unequal mass of product. Therefore, in the era of free competition, those commodity producers who received lower profits sought to invest their capital in industries where profits were higher. If this happened, then the supply of goods in less profitable industries decreased, and in more profitable ones, it increased, and market prices for goods manufactured in industries into which new capital flowed decreased, and in industries from which capital outflowed, they grew and became higher. market value. When the amount of profits in different industries is equalized, the flow of capital stops, a single general rate of profit is established, and in each industry an equal average profit will be received for equal capital. This profit is an element of average market prices, or production prices. So, as a result of inter-industry competition, a single market, or social value, turns into the price of production, around which market prices fluctuate. In modern conditions, the bulk of intersectoral capital transfers occur within the framework of diversified concerns and conglomerates.

With the emergence of monopolies, free competition turns into monopolistic, or imperfect, conducted between large companies within the monopolized sector, as well as between members of group monopolies, and small and medium-sized firms. Imperfect competition is the struggle for the monopolization of sales markets, sources of raw materials, energy, and for obtaining government contracts, loans, for ownership intellectual property(patents, licenses, etc.).

Price competition is the struggle between commodity producers for the consumer by reducing production costs, lowering prices for goods and services without significantly changing their quality and range. Distinctive feature price monopolistic competition is price discrimination, in which the same product or service is sold to different groups of buyers at different prices due, for example, to dictate transport companies when transporting perishable agricultural products.

Non-price competition is the struggle between commodity producers for consumers through the introduction of scientific and technical progress achievements into production, leading to an improvement in the quality of products and their range.

In order to conquer large sales markets, companies widely practice such methods as extending warranty periods, providing credit to customers, etc. Non-price competition is predominantly in the conditions of the dominance of an oligopolistic monopoly structure. In the process of competition, oligopolies enter into both open cartel-type agreements and secret, unspoken agreements. Such competition is characterized by a certain price stability, since between several powerful companies they are agreed upon in a unique form, called “price leadership,” which will be discussed in more detail in another topic. Non-price competition more fully reflects the interests of consumers.

A type of imperfect competition is dishonest competition, which is conducted primarily by non-economic methods using bribery of officials, industrial espionage, concluding secret agreements on a unified price policy, and even sabotage against a competitor.

Depending on the types and forms of competition, the corresponding types of prices are formed. Under the dominance of monopolies, monopoly high and monopoly low prices are established, first of all. A monopolistically high price is set by the commodity producer who is a monopolist in production and in the market. It limits competition, violates consumer rights, and as a result receives high profits. Monopoly low price

Monopoly high prices lead to a decrease in the effective demand of the population and attract competitors, so monopolies must constantly seek the optimal ratio between the quantity of products sold and the price, which makes it possible to appropriate maximum profits.

When a market is dominated by a few oligopolists, the practice of “price leadership” is typically used. To avoid exhausting competition, the most powerful company sets prices for its goods or services, and the remaining oligopolists, with general tacit consent, set the same or slightly lower price (depending on the quality of the product, warranty periods, etc.).

Prices for goods manufactured by state-owned enterprises are regulated by the state, for example, electricity, communication services, etc.

In order to weaken the negative consequences of economic monopolization, in particular, the practice of monopolistic pricing, antitrust laws are being adopted in developed countries of the world, agreements between large companies are being monitored, etc.

Antimonopoly activity of the state. Antimonopoly activity is a set of measures aimed at limiting the activities of monopolies, as well as the creation of appropriate legislation.

Antimonopoly laws were first adopted at the end of the 19th and beginning of the 20th centuries. in the USA, Canada, Australia, since monopolization in these countries occurred most intensively. They formally prohibited trusts and some other forms of monopolies and were based on the understanding of Monopoly as the complete (absolute) dominance of one company (or association of companies), or the complete exclusion of competition. This interpretation of the essence of monopolies almost did not concern oligopolies, which, as a rule, are not subject to antimonopoly legislation, which also includes laws prohibiting or regulating agreements between enterprises aimed at limiting competition by dividing markets, agreeing on prices, and limiting trade.

There are American and European systems antimonopoly law. The first originates from the Sherman Act of 1890 and with additions in 1914, 1936, 1950. remains America's only antitrust law. It prohibits not only various forms of monopolies, but also the very attempt to monopolize trade. The US Supreme Court has developed the doctrine that a corporation's dominant position in production and its large size cannot in themselves be considered monopolization. The same law prohibited trusts and cartels (bullets). To get around it, monopolies created holding companies, carried out a complete merger of corporations, in which the production and legal independence of the absorbed companies was eliminated, and cartel agreements were replaced by unspoken gentlemen's agreements or so-called “price leadership.” Subsequent laws prohibited mergers if they would substantially lessen competition or create monopolies.

Antimonopoly laws are implemented by specially created bodies. In the United States, for example, these are the Federal Trade Commission and the Antitrust Division of the Department of Justice. The main purpose of antimonopoly laws is to limit monopolies and their power, create a competitive environment, support and promote the development of small businesses. The antimonopoly law most strictly controls horizontal mergers, that is, the combination of enterprises that produce the same type of goods and services, since this leads to monopolization of the industry. Methods for implementing antimonopoly laws include liquidation of a company, high taxation of monopoly profits, control over prices of monopolists, unbundling of monopolies, etc.

The European and Japanese antitrust systems do not prohibit monopoly itself, but only its abuse of power. The main form of government control is the system of registering cartel agreements with special bodies, since cartels are considered useful for economic development. Most antitrust laws of European countries prohibit such types of monopoly agreements as agreements on the division of markets, fixed prices, etc. In Germany, a monopoly is considered a company that has concentrated a third of the circulation in its hands, in Japan - if the share of one company exceeds 50, and two - 75% or more. In the EU, only those agreements that limit competition between member-participants of this organization are subject to registration.

The adoption of antimonopoly laws weakens the process of monopolization of the economy and contributes to increased competition. However, at the same time, monopolistic associations are transformed into new forms - group monopolies, and vertical structures are created (associations of firms connected by production and technological dependence).