Главная страница | Контакты | Случайная страница Автомобили Астрономия Биология География Дом и сад Другие языки Другое Информатика История Культура Литература Логика Математика Медицина Металлургия Механика Образование Охрана труда Педагогика Политика Право Психология Религия Риторика Социология Спорт Строительство Технология Туризм Физика Философия Финансы Химия Черчение Экология Экономика Электроника

Antitrust and competition policy

Theme 6. Competition and Monopoly

The essence of competition. The theory of perfect and imperfect competition

Competition means competition between the individual subjects of the market economy for the most favorable terms of production and sales of goods.

The essence of competition is manifested in the following of its features:

• Regulatory

• Innovation - promoting growth in production efficiency through the use of the achievements of scientific and technical progress;

• allocative (feature location)

• Sanitize - the elimination of non-competitive enterprises;

• Promotional - lower prices and higher quality.

The following types of competition:

• functional (competition of certain goods);

• competition in price and quality;

• inter-company (among individual firms, industries);

• intra-and inter-branch;

• perfect and imperfect.

The concept of "perfect competition" has a special role in economic theory. The reason is that the studies of perfect competition market explain situations that are not spond to the requirements of that structure.

Main Characteristics of perfect competition:

1. On the market at the same time there are many firms, each of which occupies a small share of the market

2. Homogeneity of products

3. Freedom of entry and exit from the industry

4. There fairness information

Theory of monopoly

Monopoly in the economic theory called this type of market in which there is only one seller of certain goods. This is an extreme opposite of perfect competition.

The existence of monopoly due to the presence of four basic conditions:

1. One seller confronts a large number of buyers

2. The absence of perfect substitute’s goods.

3. Lack of freedom of entry.

4. Perfect knowledge about the parameters of the market.Manipulating in order to maximize profit volume or price level, the monopolist has to know all the possible relations between prices and demand volumes.

Antitrust and competition policy

Competition policy - a set of measures of the government, aimed at the prevention, control and suppression of monopolistic activity, providing all enterprises a level playing field and to avoid unfair competition.

The main measures of antitrust policy:

1. Measures for the correction of conduct that prohibits anti-competitive actions.

2. Structural policy in the structural changes of the industry.

The most typical actions of monopolies who meet the definition of restrictive practices are:

1) monopolization of the market

2) price-fixing

3) the merger

4) re directorates

5) price discrimination