How to reduce the harm of monopoly to the economy

Monopoly will lead to the concentration of local wealth, leading to serious contradictions among the people, and the final result may lead to the collapse of the system.

Affect the normal play of market ** signals. ** is the signal of market resource allocation, when a commodity is in short supply, the formation of a seller's market, the commodity ** increase, so that the resources engaged in the production of the commodity increase, more enterprises will carry out the production of the commodity, so as to increase the supply to meet the demand, balance the market supply and demand; When there is an oversupply of a commodity, a buyer's market is formed, and the commodity declines, causing an outflow of resources, thereby reducing supply and increasing demand. **It is under the influence of supply and demand that production is automatically regulated, circulation is regulated, and the effective allocation of social resources is realized.

The existence of monopolistic behavior makes it impossible to correctly reflect the supply and demand relationship and competition situation of the market, and disrupts the normal market order.

Affect the fair competition between enterprises in the industry. Market competition should be fair competition and honest competition. If you want fair competition, you must fight against monopoly, and it is impossible to compete if you form a monopoly.

The monopoly of some enterprises in an industry will inevitably cause unfair competition among other enterprises in the industry, and the monopolistic behavior of an industry will also affect the overall competition of its upstream and downstream industries, resulting in the implementation of monopoly industry enterprises to obtain illegal competitive advantages, and at the same time, the combination of enterprises in the industry that implements monopoly will also strike at potential entrants in the industry, so as to safeguard the overall interests of monopoly implementers, so as to form unfair competition for enterprises in other industries, It destroys the normal order of competition in the enterprise industry.

Affect the improvement of consumer welfare. Monopolistic behavior exposes consumers to losses. Microeconomics reveals that the equilibrium** and equilibrium output determined by monopolies and competitors are different.

Competitors produce at a level equal to the marginal cost, while a monopoly produces at a level higher than the marginal cost. Therefore, the monopoly output will be lower than the competitive output, and the monopoly will be higher than the competition. That is to say, the monopoly controls production by controlling the output**, which will bring two major losses to consumers:

The first is the loss of the first aspect. Consumers are more receptive than competitive conditions when buying the same amount of product**. This part of the consumer's loss is transferred to the monopolist as a monopoly profit because the monopolist restricts output and raises the price, or it is exploited by the monopolist.

The second is the loss of consumers in terms of the number of purchases. Consumers cannot purchase sufficient quantities of goods at the same **.

It affects the efficiency of economic operation and scientific and technological progress. Whether the monopoly implementers of industry enterprises restrict the competition of competitors in the same industry or the competition between the upstream and downstream operators of the industry, it will cause the solidification of interests in the industry and related industries, and the normal competition between the same industry will inevitably be difficult to improve the efficiency of the entire economy. **The lack of competition caused by the implementation of monopoly and the solidification of the monopoly interests of market players are easy to cause the reduction of enterprises' willingness to innovate, thereby hindering the speed of scientific and technological progress of the society as a whole.

Monopoly will cause individual enterprises to control the industry, which will lead to a series of problems in output, quality, and finally cause the overall quality of the industry to decline, and the economy and demand will be adversely affected.

What are the dangers of monopoly industry:

1. After the monopoly of the industry, there is a single company in charge and increases the price privately.

2. After the monopoly of the industry, other small and medium-sized enterprises in the same industry lose their competitiveness, and the industry lacks market vitality.

3. Industry monopoly may cause political and economic instability.

4. Monopoly raises the cost of the entire society.

5. Industry monopoly leads to insufficient effective investment.

6. Administrative monopoly breeds a cancer of corruption.

7. Monopoly raises the cost of the entire society.

8. Service monopoly harms the interests of consumers.

9. Industry monopoly is not conducive to the improvement of enterprises.

China's monopoly industries include: tobacco, railways, electric power, salt, telecommunications, postal services, petroleum, etc.

The harm of monopoly is to affect the normal play of the market. Monopolies often infringe on consumer rights through inequality and other means. Abuse of market dominance to exclude and suppress competitors is very detrimental to social progress.

There are many dangers of monopoly, mainly reflected in the first is that the first will be very high, and the profits will be high, the second is the poor service attitude, the third is from the buyer's market to the seller's market, and the fourth is also a very critical point, the goods will be relatively lacking, can not meet the demand.

The most important harm caused by monopoly is that the consumer does not have his own pricing power, and it will lead to its inflated prices, which will bring unnecessary economic burden to consumers.

If you monopolize, you will have a certain product, and the quality cannot be guaranteed in the hands of one merchant alone, because there is no competition.

The second harm of monopoly is that it will slowly increase the number of commodities. It increases the financial pressure on consumers.

Monopoly can also cause the faulty development of one industry, so that other companies that develop several industries face bankruptcy, resulting in an economic crisis.

The harm caused by monopoly is that one company dominates, loses the balance of the market economy, breaks the law of the market economy, and orderly development will also cause unfair competition, bully the small with the big, lose social stability and development with the strong, and cause harm to a stable and united society.

Monopoly is very disadvantageous for consumers, because once a monopoly is created, then in this industry is generally a monopoly with this enterprise, and the standards he set, for example, he may set a very high standard but because of him, a monopoly has been formed, and you have to buy, for those people who have demand. At this time, the cost will cause a big increase, and his quality, because there is no substitute, so he will not be able to guarantee the quality.

Legal analysis: 1. Monopoly will affect the normal play of market signals.

2. Affect the fair competition between enterprises in the industry.

3. Affect the improvement of consumer welfare.

4. Affect the efficiency of economic operation and scientific and technological progress.

Legal basis: Anti-Monopoly Law of the People's Republic of China

Article 1: This Law is enacted so as to prevent and stop monopolistic conduct, protect fair competition in the market, increase the efficiency of economic operations, safeguard the interests of consumers and the public interest, and promote the healthy development of the socialist market economy.

Article 2 This Law shall apply to monopolistic conduct in economic activities within the territory of the People's Republic of China; This Law applies to monopolistic conduct outside the territory of the People's Republic of China that has an impact on the elimination or restriction of competition in the domestic market.

Article 3 The monopolistic acts provided for in this Law include:

1) The undertakings reach a monopoly agreement;

2) Abuse of a dominant market position by a business operator;

3) A concentration of undertakings that has or may have the effect of eliminating or restricting competition.