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Table of Contents

Table of Contents.................................................................................................................2 What is Monopoly?..............................................................................................................3 Classification of monopolies................................................................................................4 1)Collusion between big companies................................................................................4 2)Natu al monopoly.........................................................................................................! 3)"egal monopoly............................................................................................................! 4)Technological monopoly..............................................................................................# !)T a$ema % monopoly...................................................................................................# #)Monopoly e&e cise$ th ough cont ol of inputs.............................................................# Monopoly 'owe ..................................................................................................................( Monopolies in the )omanian economy ..............................................................................* +ibliog aphy......................................................................................................................1!

What is Monopoly?

Monopoly is a ma %et st uctu e with the following cha acte istics, ma %et the e is one company that sells a uni-ue p o$uct which is p otecte$ f om i.als ente ing the ma %et. This is an i$eal st uctu e. /n eal wo l$ con$itions can only be app o&imate$ monopoly because, 1) a ely can fin$ a ma %et whe e one company ope ates0 2) a ely can i$entify a p o$uct fo which the e a e no substitutes an$ 3) no fi m is pe fectly p otecte$ f om ent y of othe competito s in the ma %et. 1o e&ample0 owne ship of a a e mine al $eposit is a p etty goo$ p otection0 but the e is the possibility of $isco.e ing othe $eposits. 2.en when monopoly is p otecte$ by law 3 the autho ities $o not allow i.al fi ms to ente the ma %et 3 a e li%ely to change the law. 4lthough the e is a ma %et that featu es fully meet the ma %et st uctu e of monopoly0 the monopoly use of a fo mal mo$el allows un$e stan$ing the beha.io of fi ms ope ating in such ma %ets.

Classification of monopolies

The eme gence of monopolies is base$ on se.e al easons. 5owe.e 0 it ta%es many fo ms an$ ha.e $iffe ent oles an$ functions in a national economy. The efo e the nee$ a ises f om the .e y beginning to ma%e thei classification0 ta%ing the fo m of monopolies an$ the main c ite ia that gi.e ise to causes an$ cont ibuting to thei $e.elopment nee$s. 5ighlighting the main causes of the eme gence an$ maintenance of monopolies in a ma %et economy can actually constitute an$ a fi st e&planation of thei occu ence0 a eas in which they $e.elop0 an$ the fo ms it ta%es. /n ma %et economies monopolies ta%e $iffe ent fo ms0 such as,

1)Collusion between big companies

Concent ation of p o$uction an$ accumulation of capital th ough pu chases an$ me ge s an$ companies an$ fi ms on ho i6ontal an$ .e tical line esults in e$ucing the numbe of competito s. 4mong these a e mo e easily achie.e$ sec et $eal to sha e ma %ets0 setting p o$uction -uotas an$ si6e of the selling p ice of p o$ucts on the ma %et.

2)Natu al monopoly
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The CTM pe te men lung economy of scale in '1 ce tain a eas C Mg 8enit cont ibute to lowe ma ginal Ce e e p o$uction costs to an e&tent such that othe fi ms with a lowe 72 71 .olume of acti.ity coul$ not each such a Cantitate pe fo mance. Meanwhile0 in ce tain a eas o economically o technologically not possible e&istence of se.e al competing companies because it woul$ mean spen$ing too much in.estment. The e a e classic e&amples of elect icity $ist ibution netwo %s0 gas an$ wate 0 $ist ict heating netwo %s0 i igation systems0 the netwo % of ailways. :oubling o t ipling these netwo %s only wish that the e woul$ be competito s in economically i ational0 since on the one han$0 woul$ e-ui e a $oubling o t ipling the .olume of in.estment0 on the othe han$0 between these ente p ises ha.e coul$ achie.e collusion to fi& p ices an$0 in fact0 the p oblem of esto ing competition woul$ not sol.e e.e ything.

3)"egal monopoly
The e a e ce tain p o$ucts o secto s of st ategic inte est ;national $efense) an$ the public inte est to be sub<ect to public sc utiny /n this connection may be mentione$ those of the health secto o the public to be cont olle$0 such as0 fo e&ample0
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manufactu e an$ $ist ibution of pha maceutical $ ugs o substances ;mo phine) p o$uction an$ ma %eting of tobacco an$ alcohol0 an$ p o$uction an$ use of = anium0 the a$ioacti.e isotopes0 the p o$uction of money0 stamps0 etc.

4)Technological monopoly
Mostly f om owne ship of in.ention patents an$ copy ight0 which gi.es the in.ento o autho e&clusi.e cont ol o.e new p o$uct o new technology o.e the whole pe io$ p esc ibe$ by law ;1! to 1( yea s fo patents) 4lso any manufactu e new p o$uct sol$ on the ma %et has a pe io$ of monopoly position0 which will ta%e time until othe companies will come on the ma %et with simila p o$ucts o substitutable. /n contempo a y con$itions0 technological monopoly is wi$esp ea$ because0 on the one han$0 systems in which the esea ch an$ inno.ation0 an$ on the othe han$0 conce ns to stimulate an$ e&pan$ esea ch an$ $e.elopment0 the main gene ato of the inno.ation p ocess.

!)T a$ema % monopoly

To$ay inclu$es a la ge numbe of p o$ucts of mo$e n in$ust y. ' o$uct image c eate$ by the o iginal mo$els f om time to time enewe$0 an$ gua antee p o$uct -uality a e elate$ to t a$ema % that is uni-ue0 un epeatable an$ ecogni6e$ as an in.estment in a$.e tising pe sistently by the se iousness an$ p omptness with which custome s a e se .e$.

#)Monopoly e&e cise$ th ough cont ol of inputs

>uch as ene gy0 some mine al bau&ite0 coppe 0 tin0 etc. mainly $ue to thei a ity an$ impo tance of owne ship of $eposits.

Monopoly 'owe

4ll p o$ucts ha.e a substitute mo e o less goo$. /f any company comes to monopoli6e wheat ma %et0 p o$uce s woul$ continue to suffe competition f om ye0 ba ley0 etc.. /f / sai$ the e is no f ee ma %et with competition0 it must be sai$ at once that the e is no pu e monopoly. /n eality0 it is mo e co ect to spea% of monopoly powe to efe to la ge o smalle $eg ee in which a company can influence p ice o p o$uct. Monopoly powe $epen$s on the $iffe ence between p o$uct p ice an$ ma ginal cost. When p ice an$ ma ginal cost a e e-ual0 the ma %et is in a situation of f ee competition an$ monopoly powe is 6e o. Monopoly powe is ma&imum when ma ginal cost is 6e o, at that point now sets a positi.e p ice fo a goo$0 that if the e was f ee competition woul$ ha.e been f ee. 4nothe facto influencing the powe monopoly is the elasticity of $eman$, a lowe elasticity g eate powe /f an asset whose monopoli6ation claim is totally

igi$0 coul$ set any p ice now. The e&istence of eplacement goo$s is mo e elastic $eman$ an$ e$uces monopoly powe . Companies can thus inc ease thei monopoly powe o $ec easing the p o$uct substitutability o 0 in othe wo $s0 it $ife ientiin$u f om those of competito s. ' o$uct $iffe entiation is achie.e$ th ough small changes in $esign0 supplements0 pac%aging0 financing an$ especially th ough a$.e tising techni-ues. The esult is a %in$ of monopoly ma %et that is calle$ competence.

Monopolies in the )omanian economy

/n ou count y0 p oblems of monopoly a e of a pa ticula place. ?n the one han$0 became necessa y to $efine the types of monopoly p e.ailing in )omanian economy to e&pan$ awa eness an$ app eciation of them. ?n the othe han$0 is full of g eat %nowle$ge econsi$e ation of monopoly0 monopolistic competition an$ ma %et mechanisms functioning mo$e n economy. 4s fo many people these p oblems a e new0 thei theo etical cla ification has become necessa y fo se.e al easons, To emo.e misconceptions0 wi$esp ea$ in ou count y in the last fou $eca$es by Ma &ist economic lite atu e0 with simplifying things0 phenomena often p esente$ in a biase$ way 3 on the one han$0 c itics of the st uctu e an$ functioning ma %et economy an$ on the othe han$0 the apology fo the

socialist economy0 in both cases ma%ing use of concealing the t ue state of affai s an$ facts. To achie.e the ob<ecti.e %nowle$ge of economic systems0 thei way of o gani6ation an$ management0 calls fo a b oa$ %nowle$ge of scientific in.estigation0 ta%ing as a c ite ion fo e.aluating economic efficiency. To fo mulate a set of accu ate mo$els as close to eality .e y $i.e se an$ thei c itical compa ison. ?nly in this way will be emo.e$ an$ false clich@s theo etical economic p actice will be able to ha.e choices0 the co ect solution fo the establishment in )omania of the fo ms of competition to enable the emo.al of all ph enic facto s of the economy0 inclu$ing the impo tant at p esent is closely wo.en manufactu e with monopoly of state owne ship in all secto s of the economy. /n )omania0 as in othe neighbo ing count ies0 the monopoly was establishe$ in a well3 ennet0 the socialist p ope ty an$ the gene al p inciples of o gani6ation an$ management of the cent ali6e$ economy. Monopoly has e&pan$e$ api$ly0 eaching a elati.ely sho t time to $ominate all sphe es of economic an$ social acti.ity an$ the enti e economic mechanism0 acting in the following ma<o $i ections, cont ol of p ice le.el an$ -uality of output0 consumption by e&e cising $ictato ship p o$uction subo $ination of consume inte ests of p o$uce s. T aining an$ $e.elopment of this system is base$ on causal e&planation0 among which we mention the following, gene ali6ation p ope ty of the coope ati.e state an$ collecti.ist type0 which e-ui e$ the $e.elopment of all fo ms of o gani6ation of economic entities an$ the use of a mechanism an$ management tools essentially monopolistic natu eA total subo $ination of the economic element to the political element0 which e-ui e$ the int o$uction of the economic life

of political p inciples 3 .olitional0 an$ cent alist a$minist ati.e cont olA concent ation of p o$uction in la ge an$ .e y la ge units towa $s in.estment an$ me ge an$ consoli$ation p ocess of small unitsA monito ing an$ ca ying out the speciali6e$ units of the whole in$ust y by eliminating $uplication in manufactu ing o.e all an$ by concent ating thei p o$uction at a single manufactu e system that co espon$e$ to the cent ali6e$ management of an a$minist ati.e p inciple. /f the ma %et economy can not spea% of a monopoly0 but athe monopolistic elements that a ise an$ $e.elop a gene al fun$ competition in )omania0 cent ali6e$ economy was fo me$ an$ consoli$ate$ a comp ehensi.e monopoly0 f om which they we e emo.e$ almost all the elements gene ating competition. ?nly with the a$.ent an$ $e.elopment of p i.ate p ope ty begins the gene al fun$ of the monopoly system0 to appea an$ $e.elop competiti.e system. What a e the elements of monopoly in )omania that will continue to hin$e the competiti.e elationships in t aining? Maintaining state monopoly as the owne an$ a$minist ato of the .ital esou ces of the economy by autonomous mining secto ;oil0 gas0 elect icity)0 in manufactu ing0 t anspo t an$ telecommunications secto s an$ maintaining >tate capital in the company0 %eeping the state a$minist ation of esea ch0 e$ucation0 health0 also maintaining state owne ship of a fifth of the best an$ most fe tile ag icultu al lan$0 fo ests0 i igation systems0 the state hol$ing of ma<o ity sta%es in companies .a ious comme cial in$ust ies. This will pe petuate the state monopoly o.e basic esou ces. >o this system will be cont olle$ by the main inputs that will not stimulate the economy0 but will continue to annihilate competition. Maintaining coope ati.e fo ms of o gani6ation typical monopolist in the fiel$ of small in$ust ies0 han$ic aft wo %shops an$ in$ust ial goo$s in u al a eas of sales ;sales coope ati.es).
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:espite its status to semi3state coope ati.e system in this secto 0 o gani6ational fo ms0 $i ectly an$ in$i ectly cont ols the o.e all acti.ity of the components an$0 abo.e all0 the p ices an$ ta iffs0 the manufactu e0 asso tment0 -uality p o$ucts an$ se .ices0 etc. p ecisely because the system is monopolistic o gani6ation. =n$e the label of autonomy0 the coope ati.e is not sub<ect to p i.ati6ation0 which is an obstacle to competition an$ ob.iously e&ten$s the pa a$o& 3 the .e y secto which shoul$ sta t $e.eloping the elations of ma %et economy an$ e.i.e competition is mo e conse .ati.e in this ega $. This secto 0 with most competiti.e .ocation has become a b a%e on the t ansition to an economy base$ on f ee competition. >mall p o$uction of in$ust ial goo$s0 along with the fa m can help e.i.e the ma %et economy0 with the con$ition of $emonopoli6ing this secto . The e&istence in ou count y an in$ust ial system with a high concent ation of p o$uction0 that the sole moti.ation of the absolute supe io ity of economies of scale. +y some estimates0 )omania is in te ms of si6e in$ust ial units in secon$ in the wo l$ afte C6echoslo.a%ia. +ut to cha acte i6e the $eg ee of monopoli6ation0 not the si6e of the business itself is impo tant0 but also la ge companies that only manage to p o$uce a la ge numbe of copies of the same p o$uct0 so that $uplication is eliminate$ o 0 othe wo $s0 the e is only one manufactu e o to the whole count y o the geog aphical a eas as la ge0 which e&clu$es0 as a ule0 in p actice0 competition between p o$uce s. 1o e&ample0 in many in$ust ies ;machine buil$ing0 elect ical0 elect onics0 chemist y0 metallu gy0 etc.). ?utput is p o.i$e$ by only one manufactu e o a small numbe of p o$uce s by eason of the minimum batch si6e0 specialty insu ance0 the $e.elopment of mo$e n manufactu ing technologies in.ol.ing a ce tain .olume of p o$uction0 etc. 2.en in a eas of buil$ing mate ials0 whe e $eman$ is la ge an$ $i.e se an$ t anspo t of aw mate ials an$ p o$ucts is e&pensi.e the e0 f e-uently0 uni-ue p o$uce s th oughout the count y. /n this connection may be mentione$ p o$ucts, '8C wallpape 0 ce amic tiles gla6e$0 enamele$ cast i on .ats0 non3
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fe ous metal fittings fo plumbing an$ inte io sheet bathtubs0 $ ain pipes an$ sanita y enamele$ cast i on0 etc... Concent ation of p o$uction on a la ge numbe of p o$ucts usually singula p o$uce s e&pan$e$ scale so la ge as this p actice is pe fectly insc ibe$ on the one han$0 cent ali6e$ management system of a$minist ati.e0 on the othe han$0 implementation of the p inciple of speciali6ation of in$ust ial units with %nown economic a$.antages fo the manufactu e . To$ay this state of things became incompatible with the t ansition to ma %et economy as gene ato s without competition0 ma %et mechanisms can not ope ate o ope ates $efo me$. The anomaly comes f om the fact that the manufactu e %eeps the $ictato ship of p o$ucti.e an$ unp o$ucti.e consume 0 monopolistic company e&e cising complete cont ol of p o$uct p ice an$ p o$uction .olume to its a$.antage an$ the $et iment of consume s an$ society as a whole. 4n igno ance of this eality o an un$e estimate of this phenomenon has c eate$ an$ continues to c eate g eat $ifficulties in implementing measu es to t ansition to a ma %et economy. 1o e&ample0 the shift to p ice libe ali6ation0 un$e the p e.ailing monopoly p o$uce s in almost all economic secto s an$ the gene al con$itions of a sho tage of p o$ucts0 t igge e$ an ana chic inc ease of $isc etiona y p ices0 wo sening economic c isis0 the $ange of comp omise0 the .e y p ocess of t ansition to ma %et economy in the face of many people. The e&istence of the gene al sho tage of p o$ucts an$ complete libe ali6ation of p icing is fa.o able con$itions emphasi6e the beha.io of monopolistic fi ms p o$ucing them acting on thei own an$ without any est ictions c eate$ by public cont ol. Ta%ing a$.antage of the ch onic gap between supply an$ $eman$0 the latte being much la ge companies 3 whethe o not the only manufactu e 3 set p ices an$ %eep p o$uction inc ease$ at a low le.el so that they coul$ co.e all costs an$ to obtain an$ a supe p ofit. Ten$ to inc ease p ices an$ maintain low p o$uction .olume is limite$0 howe.e 0 $ec ease$ pu chasing powe of people. /f the e we e .e y insistent wage $eman$s woul$ g a$ually
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each a balance between supply an$ $eman$0 ising p ices p o.i$e$ by p o$uce s an$ monopolistic actions woul$ mitigate. 5owe.e 0 satisfying the $eman$s to inc ease wages by in$e&ing0 maintaining the gap between supply an$ $eman$0 along with moneta y inflation an$ an agg essi.e monopolist p ese .ing beha.io 3 the manufactu e to the consume . /n sho t0 these a e the main causes an$ conse-uences of monopoly0 an$ the fo ms it ta%es this phenomenon in ma %et economies0 as in that of ou count yDs economy. /n economic theo y an$ p actice a e issue$ nume ous app oaches an$ solutions on the line $e3monopoli6ation o establishment of competition. /t is often a gue$ that monopoli6e p ocess must accompany the p i.ati6ation. +ut these two0 p i.ati6ation an$ $e3monopoli6ation must not be confuse$. ' i.ati6ation ta%es place only $ismantling the state monopoly on the p ope ty. Monopoly manufactu e is maintaine$ an$ p o.i$e$ on p i.ate p ope ty. 1u the steps in.ol.e the establishment of competition outsi$e of the p i.ati6ation0 steps which a e as complicate$ an$ e&pensi.e. /tDs mainly th ee ma<o catego ies of actions. The fi st efe s to the c eation an$ E o et aining of in$ust ial units fo the p o$uction of simila o substitutable. Natu ally0 the p ocess is lengthy an$ e-ui es a la ge in.estment an$ o gani6ational effo t. .+ut it can not be neglecte$. ?ppo tunity most lea$ to such a la ge p o<ect is the p epa ation fo p i.ati6ation of economic entities. /n fact0 the main ob<ecti.es of units li%e p i.ati6ation t aining shoul$ inclu$e p epa ation fo ope ation an$ competiti.e con$itions0 to consi$e so3calle$ bu st of o gani6ation system base$ on the p inciple of a single manufactu e . Ma%ing fu the p i.ati6ation by maintaining monopolistic p o$uction systems that a e p e.alent in the )omanian economy0 o.e all economic system $oes not tu n into a eal competiti.e ma %et economy. /t is a $eeply $isto te$ economy0 not put in the se .ice consume 0 but in the se .ice of economic an$ financial oliga chy.

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The secon$ catego y efe s to the a$option action cu ent antimonopoly policy towa $s the impo t of simila p o$ucts manufactu e$ by local monopolies. Th ough an acti.e policy of impo t competition may be cancele$0 in p actice0 fi ms ten$ also impose monopoly p ices an$ to manipulate the le.el an$ -uality of p o$uction. The thi $ catego y of actions is the $e.elopment of antimonopoly legislation an$ the p otection of competiti.e acti.ity. : afting of such legislation an$ an effecti.e mechanism fo its enfo cement is of pa ticula impo tance fo the cu ent phase of the )omanian economy. No mati.e $ocuments shoul$ set the limit of pu suing economic acti.ities such as fo mal o info mal a$option a angements0 the fo mation of associations an$ o gani6ation systems0 etc. 1o e&ample0 ag eements between business units to fo m o gani6ational systems base$ on p inciples of hol$ing companies0 although seem ational in te ms of economics an$ management0 in te ms of competiti.e economy they can be counte p o$ucti.e. The efo e0 it must be state$ in the egulations that limit f amewo % in which economic agents ha.e the ight to act an$ associate fo not cont a.ene the p inciples of competition. Consi$e 0 b iefly0 still fi m monopolistic beha.io in the ma %et mechanism0 namely0 how it sets its selling p ice0 which functions an$ how these functions a e use$ in the analysis of p ice an$ p ofit an$ is the efficiency of monopoly compa e$ with that of f ee competition.

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+ibliog aphy

F. 4. 1 ois0 2conomia politica0 2$. 5umanitas0 +ucu esti0 1BB4 2conomia politica0 4>20 2$. 2conomica0 +ucu esti0 1BB! M. Flais0 Mic oeconomie0 2$. 2conomica0 'a is0 1B*3 Fhe asim0 Mic oeconomie0 .ol. 20 2$. 2conomica0 +ucu esti0 1BB4. +e na $ Fue ien0 2conomia neoclasica0 2$. 5umanitas0 +ucu esti 0 1BB30 C. Fogoneata0 4. Fogoneata0 2conomie politica0 Teo ia mic o si mac oeconomica0 'olitici economice0 2$. :i$actica si 'e$agogica0 ).4.+ucu esti 0 1BB!
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