Monopoly what types of monopoly in the economy and the formation of the concept, the disadvantages of monopolistic practices, increase in monopoly profits through trade control, the monopoly is an economic situation that control one company in production and marketing, or just one of these activities, for a particular product or service. Word of Greek origin, is that Mono means “one” and “sell” means Pauline.
The term is also used when the monopoly, even with competitors, a particular company or group of businessmen controlled almost entirely on sales for a particular product, leaving a small segment of the market to competition.
In a market economy, monopoly disadvantage for consumers, since they undermine free competition. This occurs because the company or group of companies that have exclusivity or broad in the production and sale of a commodity product prices can be monitored and kept at a high level. It can also occur in autumn a quality product or service company monopoly, without competition, there is no interest in making investments to increase quality.
Monopolistic practices (types of monopoly)
Companies from the same sector together to adopt commercial practices by mutual agreement, in order to establish a price, the stock market and control of raw materials.
Occurs from the Federation or integration. Economic practices designed to increase profits through, especially the increase in the prices of their products and services.
A group of companies, one of them controls the group through a controlling share. The parent company usually does not produce, but only makes financial management, and centralized management. Thus, the holding company controlled by capital to the subsidiaries, preferred to concentrate capital.
Commercial legislation prohibits creating monopolies and monopolistic practices in various sectors of the economy. There are legal provisions to avoid the dominance of a company marketing a product or service. Company mergers until analysis and should occur only with the approval of the specialized agencies, in order to avoid the formation of monopoly.