INTRODUCTION……………………………………………………………….2

Chapter 1. PERFECT COMPETITION…………………………..3

Chapter 2. PURE MONOPOLY AND MONOPOLY POWER ....... 5

Chapter 3. MONOPOLISTIC COMPETITION……………....8

Chapter 4. OLIGOPOLY………………………………………………..10

Chapter 5. OTHER FORMS OF PERFECT COMPETITION..12

Chapter 6. ANTI-MONOPOLY REGULATION………………14

SISOK OF LITERATURE………………………………………………...16

INTRODUCTION

A market is an institution or mechanism that brings together buyers (demanders) and sellers (supplyers) of particular goods, services, or resources. At the same time, markets take the most different forms.

As for the structure of the market, the following can be said about it: market structure is a complex concept that has many aspects. It can be determined by the nature of the objects of market transactions. There are markets for factors of production (land, labor, capital), markets for products and services, markets for durable (more than a year) and non-durable (up to a year) goods, etc. The classification of the market structure is based on determining the number of sellers and the nature of the product.

The market structure indicates the number of buyers and sellers, their shares in the total, the amount of goods bought or sold, the degree of standardization of the goods, as well as the ease of entering and exiting the market. Pure monopoly and perfect competition are the two extreme forms of market structure. In a purely monopoly market structure, only one firm realizes the entire market supply of a particular product, while the emergence of other firms is impossible. When perfect competition there are many firms, each with a small market share, and free entry into the industry is possible. Real market structures lie between these two extremes. Limit cases, however, provide material for understanding many problems, which is useful for understanding intermediate options. Analysis of market structure data is used to determine the likelihood that firms in the market can influence the prices of the goods they sell.

Chapter 1. PERFECT COMPETITION

Perfect competition is the state of the market when a large number of firms produce similar products, but neither the size of firms nor other reasons allow even one of them to influence the market price, and therefore the demand for the products of an individual firm will not decrease as its sales increase. On a graph, the demand curve for an individual firm is a straight line parallel to the horizontal axis. For the entire market, the demand curve has a negative slope, and the supply curve has a positive slope. The intersection of the demand curve with the supply curve corresponds to a market equilibrium point with a certain market price and an equilibrium sales volume. Perfect, free or pure competition is an economic model, an idealized state of the market, when individual buyers and sellers cannot influence the price, but form it with their contribution of supply and demand. In other words, this is a type of market structure where the market behavior of sellers and buyers is to adapt to an equilibrium state. market conditions.

Features of perfect competition:

1. an infinite number of equal sellers and buyers

2. homogeneity and divisibility of products sold

3. no barriers to entry or exit from the market

4. high mobility of production factors

5. equal and full access of all participants to information (prices of goods)

In the case when at least one feature is absent, competition is called imperfect. In the case when these signs are artificially removed in order to occupy a monopoly position in the market, the situation is called unfair competition.

In some countries, one of the widely used types of unfair competition is the giving of bribes, explicitly and implicitly, to various representatives of the state in exchange for various kinds of preferences.

Perfect competition is characterized by the inability of individual sellers to influence the price of the product that each sells. No single competitive firm captures a large enough share market supply to influence the price. Monopoly, on the other hand, is characterized by the concentration of supply in the hands of the owners of a single firm. The purpose of this chapter is to understand how the equilibrium market price is likely to be affected by the effects of a monopoly on supply and the absence of competing sellers in the market. Everywhere it is assumed that the owners of the monopoly seek to maximize profits. Once monopoly price and output have been determined, they can be compared with competitive equilibrium price and market quantity, analyzing the consequences of taking over a fully competitive industry by a profit-maximizing monopoly.

Perfect (pure) competition is characterized by the existence of many sellers operating with homogeneous standard products. The number of selling firms is so great, and the share of each in the market is so negligible, that none of them is able to influence prices by changing the volume of production. The price is imposed on the manufacturer by the market. Access to the industry for new firms is wide open. Economics usually in characteristic pure competition involves perfect knowledge of the market. However, the latter can hardly be considered justified. When there are many sellers and sales volumes are insignificant, it is impossible to know the state of the market. In such a situation, firms do not know anything about each other and work for an unknown market.

Chapter 2. PURE MONOPOLY AND

MONOPOLY POWER

Features of pure monopoly:

1. Sole seller;

2. The type of product is unique - there are no close substitutes;

3. Price control;

4. Entry into the industry is blocked.

A pure monopoly is when one firm is the sole seller of a unique product.

A pure monopoly is a situation where there is only one seller of a good that has no close substitutes. This term also refers to this single seller of goods. A monopoly-dominated market is in sharp contrast to a fully competitive market in which many competing sellers offer a standardized product for sale. Buyers who want to consume the monopoly firm's product have only one source of supply. A pure monopoly has no rival sellers competing with it in its market.

The concept of pure monopoly is an abstraction. There are very few (if any) products that have no substitutes.

It's rather unusual, but pure monopoly more common in local markets than national ones. For example, if you are attending college in small town, there can only be one seller of college textbooks. The bookstore would have a local monopoly on the sale of various textbooks. In the same way, in small towns there may be a single general practitioner or a single dentist, who then have a monopoly on medical and dental services in the area. You face local service monopolies on a daily basis because most settlements there is one telephone company providing local calls. Similarly, local monopolies provide utilities such as electricity, gas, and transportation. However, many of these public utilities are regulated by government agencies in an attempt to deter these businesses from using their monopoly power influencing prices.

A natural monopoly is an industry where a good can be produced by one firm at a lower average cost than if it were produced by several firms.

A simple monopoly is a monopoly that sells its product to everyone at the same price.

A legal monopoly is a firm that holds patents or licenses that sets up barriers to other firms entering an industry, thereby preventing competition.

A firm has monopoly power when it can influence the price of its product by changing the quantity it is willing to sell. The extent to which an individual seller can exercise monopoly power depends on the availability of close substitutes for his product and on his market share. A firm does not need to be a pure monopoly to have monopoly power. A necessary prerequisite for monopoly power is that the demand curve for the firm's output is downward sloping, and not horizontal, as is the case for a competitive firm. When a firm has a downward sloping demand curve for its product, it has the ability to raise or lower the price by changing the quantity it offers.

In the extreme, limiting case, the demand curve for a product sold by a pure monopoly is a downwardly directed market demand curve for this product. The essential difference between a monopolistic market and a competitive market lies in the ability of a particular firm in a monopolized market to influence the price received for its product. A firm with monopoly power is a firm that sets the price of its product at its own discretion, and does not accept it as a given, as a market reality.

The market structure indicates the number of buyers and sellers, their shares in the total, the amount of goods bought or sold, the degree of standardization of the goods, as well as the ease of entering and exiting the market. Pure monopoly and perfect competition are the two extreme forms of market structure. In a purely monopoly market structure, only one firm realizes the entire market supply of a particular product, while the emergence of other firms is impossible. In the case of perfect competition, there are many firms, each with a small market share, and free entry into the industry is possible. Real market structures lie between these two extremes. Limiting cases, however, provide material for understanding many problems, which is useful for understanding intermediate options. Analysis of market structure data is used to determine the likelihood that firms in the market can influence the prices of the goods they sell.

In economics, the following types are distinguished market structures.

1. Pure (perfect) competition. This is the state of the market whena large number of firms produce similar products, but neither the size of the firms nor other reasons allow at least one of them toinfluence the market price, in connection with which the demand for productsan individual firm will not shrink as it increases its sales. On the graph, the demand curve for an individual firm looks like a straight lineline parallel to the horizontal axis. For the entire market, the curvedemand curve has a negative slope and the supply curve has abody. The intersection of the demand curve with the supply curve corresponds to the market equilibrium point with a certain market price andequilibrium sales volume. In a competitive market,

2. Pure (absolute) monopoly. The market is considered absolutely monopolylysed if it operates the only productionthe body of a product, and this product has no close substitutes,produced in other industries. Therefore, under conditions of puremonopolies, industry boundaries and firm boundaries are the same. That's whythe demand curve for the monopoly firm's product is similar to the curve market demand, i.e., has a negative slope.

3.Monopolistic competition. This market structure issome similarity to perfect competition, except infirst of all, the fact that the industry produces a similar, but not the sameforging products. Product similarity gives firms partial monocomplete power over the market. Product differences may or may not costquality of the goods as such. Increased demand may be due to more attractive packaging, more convenient locationstore location, the best organization trade (good serviceaccommodation, gift vouchers, after-sales service), wherebybuyers prefer this product. For each suchthe firm's demand curve has a negative slope, so the firmmay affect the price.

4.Monopsony.Market situation where there is only one buyerTel. The monopoly power of the buyer leads to the fact that he has established weighs the price.

5. A monopoly that discriminates. Usually underneath that ponyThere is a practice of setting different prices by companies for different, buyers.

6. Bilateral monopoly. A market in which one buyer, nothaving competitors, is opposed by one seller-monopolist.

7. Oligopoly.A market situation in which a small number of cerealsn firms produce most of the output of the entire industry. On theIn such a market, firms are aware of the interdependence of their sales,mov production, investment and promotional activities.

8. Duopoly.A market structure with only two firmswe. A special case of oligopoly.

The listed market structures have varying degrees distribution in reality. Perfect competition isis rather a scientific abstraction, and does not actually exist in modernexchange market. Apparently in the past XIX in. in Europe) a number of product marketskov in many respects was close to such a structure. In the presenttime with a certain degree of conditionality to perfect competition can beinclude, in particular, grain markets and valuable papers. Pure monopoly in a market economy is also extremely rare,especially nationwide.

As for other forms of the market, they are widespread intemporary business practice. Bilateral monopoly meets in the labor market, where two monopoly forces - trade unions - collide T entrepreneurial organizations. Discrimination in the field of prices took place in passenger air transportation, in medical practice, in lawyer services, etc.

But the most common market structures aremonopolistic competition and oligopoly. Bread baking, productionstvo shampoos, retail and many other activities are carried out under conditions of monopolistic competition, sincegoods and services produced by firms, at least to a small extentdifferent from the goods and services of competing manufacturers. Lion'sshare industrial production concentrated in the hands of companies.that form the oligopolistic market: automotive, metalurgical, tobacco industry, agricultural machinerybuilding, machine tool production.

Let us now consider in more detail the process of setting prices and determiningdivision of output volumes by firms operating on some of thenumerical markets

Jumpingtion is the rivalry between the participants of the market economy for Better conditions production, purchase and sale of goods.

Distinguish between perfect and imperfect competition

Perfect Competition- this is the rivalry of numerous manufacturers that create approximately the same volumes of identical (completely replaceable) products.

Imperfect Competition in contrast to the perfect is limited by the influence of monopolies and the state.

There are following models of imperfect competition:

Competition as a factor in the marketing environment

The company operates in the market in a competitive environment. Competition- rivalry of goods and enterprises aimed at capturing attention potential consumers. Competition is the basis of the mechanism of commodity production and the market economy. On fig. 1 shows the main difference between monopoly and competition.

Rice. 1 The difference between competition and monopoly

1. Investments in the development of small and medium-sized businesses and benefits for their organization.
2. Special customs policy.
3. Dismemberment of monopoly structures and the effect of antimonopoly legislation.

All these decisions must have a clear legal basis.

There are several types of competitive structures, the specifics of which must be taken into account when creating and implementing marketing programs for enterprises operating in a particular type of structure.

I. occurs when a company manufactures a product for which there is no substitute.

1. Due to the fact that the enterprise has no competitors, it completely controls the supply of these products and, as the only seller, can create barriers for potential competitors.
2. In the real world, the monopolies that exist to this day are some organizations that provide utilities, such as electricity and cable transmission of information, they are largely regulated by government agencies. The existence of natural monopolies is allowed, since their development and operation require gigantic financial resources; a small number of organizations may concentrate such resources to, for example, compete with a local electric company.
3. The main goal of marketing in a monopoly is to control the market and maintain the uniqueness of the product.

II. occurs when a small number of suppliers control a significant proportion of the supply of products. In this case, each of the suppliers must take into account the reactions of other suppliers to changes in market activity.

1. The products produced by oligopolies can be homogeneous, such as aluminum, or differential, such as cigarettes and cars.
2. For example, because of the huge financial outlay required, very few businesses can afford to enter the oil refining or steel market.
3. Some industries require a certain level of technical and marketing skills, which is an insurmountable barrier for many potential competitors.
4. Enterprises in the oligopolistic market try to avoid price wars due to the fact that such an approach is costly for everyone involved in the war.

III. occurs when a firm's potential competitors attempt to develop a differential marketing strategy in order to capture a part of the market.

1. There are several firms, but a different marketing structure, although the products are similar.
2. There is a possibility of market penetration, since the initial costs are not very high.

3. Important distinctive features goods.

IV., if it existed at all, would mean that there are a large number of sellers, none of whom can have a significant impact on price or supply.

1. The products would be homogeneous and there would be full knowledge of the market and smooth entry into the market.
2. The closest example to perfect competition is the unregulated agricultural market.
3. Very few (if any) marketers work in a purely competitive environment.
4. Pure competition is conditionally one pole of the market structure, and monopoly is the opposite.
5. Most marketers work in a competitive environment that could roughly be placed somewhere between these two extremes.
6. The market of each enterprise with this type of competition is small, the demand is elastic. It is easy to enter this market.

Types of competition:

1. Functional competition- different products can satisfy the same need.
2. Species competition- better satisfies the need for a product with higher consumer qualities.
3. Interfirm competition- the advantage in the market is the one who better captured the attention of potential consumers. Success on modern market has an enterprise that was able to provide a variety of assortment of manufactured goods and services offered, increase the value of consumer properties of products while slightly increasing the price of it, concentrating its efforts on creating new segments and new market niches.

There are also two main groups of competition methods: price, non-price.

Competition, under which at least one of the signs of perfect competition is not observed, is called imperfect. The extreme case is pure monopoly, when only one firm dominates an industry, the boundaries of the firm and the industry coincide.

When there is a limited number of firms in an industry, a situation arises oligopoly. The opposite situation occurs when there are many firms, but each of them has at least a small particle of monopoly power. Such a situation is called monopolistic competition.

The presence of one buyer in the market is called monopsony. The company that succeeds different categories consumers to sell goods at different prices is called a firm that uses price discrimination.

When a monopsonist buyer and a monopolist seller collide, we have bilateral monopoly. If there are only 2 firms in the industry, then this particular case of oligopoly is called duopoly.

perfect competition- a model of the market, which is characterized by price competition between manufacturers of standardized products that are unable to influence the market equilibrium and the market price. A market structure that does not meet at least one of the conditions of perfect competition is an imperfectly competitive market. Markets of imperfect competition, in turn, are represented by markets of pure monopoly, monopolistic competition, oligopolistic markets;

pure monopoly- a type of market structure characterized by a lack of competition, which implies dominance in the market closed by entry barriers of one firm that produces a unique product and controls the price;

monopolistic competition- a type of market structure in which sellers of differentiated products compete with each other for sales volumes, and non-price competition acts as the main reserve for achieving a competitive advantage in the market;

oligopoly- a type of market structure in which several interdependent and often interacting firms compete with each other for market share (sales volumes).

27. Conditions of perfect competition. Features of a perfectly competitive market.

The main features of the market structure of perfect competition:

1. The presence on the market of a significant number of sellers and buyers of this good. This means that no seller or buyer in such a market is able to influence the market equilibrium, which indicates that none of them has market power. The subjects of the market here are completely subordinated to the market element.

2. Trade is carried out in a standardized product (for example, wheat, corn). This means that the product sold in the industry by different firms is so homogeneous that consumers have no reason to prefer the products of one firm to those of another manufacturer.

3. The inability for one firm to influence the market price, since there are many firms in the industry, and they produce a standardized product. In conditions of perfect competition, each individual seller is forced to accept the price dictated by the market.

4. Lack of non-price competition, which is associated with the homogeneous nature of the products sold.

5. Buyers are well informed about prices; if one of the producers raises the price of their products, they will lose buyers.

6. Sellers are unable to collude on prices due to big amount firms in this market.

7. Free entry and exit from the industry, i.e. entry barriers that block entry to this market, absent. In a perfectly competitive market, it is not difficult to create new company, there is no problem if an individual firm decides to leave the industry (since firms are small, there is always an opportunity to sell a business).

An example of a perfectly competitive market is a market certain types agricultural products.

For your information. In practice, no existing market is likely to meet all the criteria for perfect competition listed here. Even markets very similar to Perfect Competition can only partially meet these requirements. In other words, perfect competition refers to ideal market structures that are extremely rare in reality. Nevertheless, it makes sense to study the theoretical concept of perfect competition for the following reasons. This concept allows you to judge the principles of functioning small firms existing in conditions close to perfect competition. This concept, based on generalizations and simplification of analysis, allows us to understand the logic of the behavior of firms.

main feature perfect competition market - the lack of price control by an individual producer, i.e., each firm is forced to focus on the price set as a result of the interaction of market demand and market supply. This means that the output of each firm is so small compared to the output of the entire industry that changes in the quantity sold by an individual firm do not affect the price of the good. In other words, a competitive firm will sell its product at a price already existing in the market.

28. The criterion for the expediency of continuing production by the company in short term.

At first glance, it may seem that making a profit will determine the decision on the feasibility of production in the short run. However, in reality the situation is more complicated. Indeed, in the short term, part of the company's costs is permanent and does not disappear when production stops. For example, the rent for the land on which the enterprise is located will have to be paid regardless of whether the plant is idle or working. In other words, losses to the firm are guaranteed even in the event of a complete cessation of production.

The firm will have to weigh when the losses will be less. In the event of a complete shutdown of the plant, there will be no income, and the costs will exactly equal the fixed costs. If production continues, variable costs will be added to fixed costs, but income from the sale of products will also appear.

Thus, under unfavorable conditions, the decision to temporarily stop production is made not at the moment of the disappearance of profit, but later, when the losses from production begin to exceed the value fixed costs. The criterion for the expediency of producing in the short term is that losses do not exceed the size of fixed costs (P< TFC).

This theoretical position is fully consistent with economic practice. No one stops production when there are “temporary losses. During financial crisis 1998 share of unprofitable industrial enterprises in Russia grew, for example, to 51%. But hardly anyone would consider the best way out of a difficult situation to stop half of the country's industry. The criterion of expediency of production is valid not only for the conditions of perfect competition, but also for any other types of market. It is no coincidence that when deriving it, we did not use any of the conditions of perfect competition.

29. The criterion for the expediency of continuing production by the firm in the long run.