How to understand what a monopoly is

The concept of "monopoly" is often found not only in economics, but also in everyday life. Let's see what exactly this type of competition is, give examples of monopoly, understand what advantages and disadvantages a monopoly has and whether it exists at all.

What is a monopoly

Imagine that some company produces unique products, which others have no analogues. It is just a unique product that creates the status of a monopoly for the enterprise, since it has no competitors. We conclude that a monopoly is an enterprise that completely controls the release of a unique product and its price, and also has no competitors due to the fact that others do not produce this product.

The benefits of monopoly

One of the main advantages is market control. If the oligopolies are equal to the price leader, then there is no need to equal anyone - you produce products and you set the price for it yourself. But putting too high is unnecessary - as people will begin to look for similar products with a low price. Moreover, the antimonopoly service, which monitors the activities of monopolists, monitors this. Therefore, not everything is so simple - monopolies cannot set a high price or set conditions for others; they must comply with antitrust laws.

Disadvantages of monopoly

Probably, the FAS control is already a drawback for the monopoly, but compliance with the law is necessary. If you approach from the other side, the lack of competition can just be a lack of monopoly, because if they exist, enterprises are trying to improve their product, thereby developing. If there is no one to fight with, then why change something. Do not think that a unique product will not change over time - it will happen more slowly.

How to enter the monopoly market

It is very difficult. Typically, monopolists are the largest enterprises, they not only control the market, they can easily crush competitors, especially newcomers. And small firms simply lack the power that the monopolist has. Having competitors is not profitable, so a large company can easily crush a small enterprise. There are many ways to do this, but that's another topic.