How monopolies cause social surplus losses

Social surplus is the sum of consumer surplus and producer surplus. Consumer surplus refers to the additional utility or satisfaction that the consumer pays for the purchased goods is lower than what he is willing to pay. Producer surplus refers to the excess profit obtained by the producer in excess of the average profit.

The reason why monopoly causes the loss of economic surplus is that there is only one manufacturer in the completely monopolized market, and it is the absolute controller. If it sets the best price adjustment that consumers can accept (no matter how high the product is, it will not be sold), the consumption surplus will disappear.

At the same time, since there is only one manufacturer, and other manufacturers cannot enter the market, the behavior of obtaining excess profits by reducing costs will not exist, so that the producer surplus will not exist. Now there is only monopolist who use their monopoly position to obtain another kind of excess profit by relying on monopoly, that is, monopoly profit.

Because monopoly profits can be obtained by monopoly, on the one hand, manufacturers do not devote themselves to improving production efficiency and reducing costs, but instead rise to the top of the boat, add pricing on the cornerstone of high costs, and pass on the loss of inefficiency to consumers and society.

On the other hand, if the ** remains high, it will also have a misleading effect on the allocation of market resources. In particular, in order to monopolize the market, monopolists often keep technological secrets or put technology on the shelf, hindering technological progress. Even in order to obtain the monopoly position of the franchise, they do not hesitate to "seek rent" or "bribe", which leads to social corruption.

From the perspective of market characteristics, it is not difficult to find that the efficiency of social resource utilization gradually declines with the increase of monopoly degree. In the process of increasing the degree of competition to monopoly, the equilibrium output decreases and the equilibrium rises.

At the same time, the external incentive skills of manufacturers under monopoly conditions are poor. Competition will undoubtedly force manufacturers to continuously improve their operation and management, pursue technological progress, improve product quality, and so on, but under monopoly conditions, manufacturers can rely on their special monopoly position to obtain excess profits, and therefore, the impulse to further improve management and pursue technological progress will naturally weaken.

Draw a picture and you can see it.

From the connotation of "monopoly", that is, "exclusivity."

Monopoly has many negative effects that affect economic growth and economic efficiency. However, "exclusive control" is also the support point of the economic order, and it also has its positive effects. For example, the basic characteristic of property rights, including intellectual property rights, is exclusivity.

Similarly, monopoly in China also has both advantages and disadvantages.

Generally speaking, it is necessary to give full play to the basic role of the market in the allocation of resources, which is one of the fundamental reasons why China's economy and society have been able to achieve tremendous changes since the beginning of reform and opening up, and is also the only way for China to move toward prosperity.

To speed up the transformation of the mode of economic development, we must persistently regard reform and opening up as a powerful driving force and comprehensively promote reform in all fields with greater determination and courage, including deepening the reform of monopoly industries and enterprises, but this does not mean that we can look at the monopoly problem without analysis.

It should be noted that in the socialist market economy.

In the process of development, the existence or emergence of monopoly phenomena in some industries also has its rational existence and objective advantage. For example, it is conducive to reducing disorderly competition. As the essential attribute and requirement of the market economy, the importance and necessity of competition are self-evident.

But there is also a distinction between beneficial competition and harmful competition.

Judging from the actual situation in our country, for a long time, there has been disorderly competition in many industries, resulting in chaotic market order, continuous counterfeiting and shoddy products, and environmental ecology.

One of the fundamental reasons for the loss of social resources is that the industrial concentration is too low. From the perspective of maintaining the order of the market economy and improving the efficiency of resource allocation, in some industries, sometimes moderate monopoly is more advantageous than disorderly competition.

Therefore, it is necessary to conduct an in-depth study and dialectical analysis of the advantages and disadvantages of monopoly under the socialist market economy, and we must avoid being one-size-fits-all and simplistic; we must not exaggerate the objective and beneficial aspects of monopoly, nor can we simply regard monopoly as a bad economic and social phenomenon and as an ineffective economic system and market structure, and completely negate it.

Monopoly refers to a kind of alliance carried out by a small number of large capitalists in order to jointly control the production, sales and business activities of one or several sectors in order to obtain high monopoly profits. It is the deepest economic foundation of imperialism and the economic essence of imperialism.

Ways to address the socio-economic losses caused by monopolies:

1. Decompose the monopoly industry.

The U.S.** can sue to demand that a company that has formed a monopoly or is close to a monopoly be broken down into a number of smaller companies.

2. Prevent the creation of monopoly.

** Oppose any competitive conduct by a company of a strong position aimed at eliminating competition.

3. Prevent mergers that weaken competition.

If a merger eventually leads to a monopoly or a near-monopoly, it will be opposed by **.

4. Prevent collusion.

Although some enterprises are not monopoly enterprises, they can seek monopoly profits by conspiring with each other to raise the standard and limit output. This approach has the same effect as the loss of social welfare caused by monopolistic competition.

Legal analysis: the most significant impact is that monopoly enterprises because there is no competition, they can charge consumers higher at will, because there are no competitors in the market, and then the sky-high price, do not care about the quality of the product, service, etc., to the next big will affect the development of productivity, material circulation is hindered, over time will affect the fair competition and development of the whole society, regret if there is only one chicken farm in the country, then how much their chickens sell, you can only accept, Therefore, the state decisively punished Alibaba according to the provisions of the monopoly law, although the competitive pressure in all walks of life is very high, but because of competition can enterprises create better products and services, if every industry is monopolized under the operation of capitalists, then the final consumer who pays for this behavior is still the consumer. If an enterprise has no competitors and no pressure because of monopoly, it will become lazy, and it will not let Sou have the development momentum and self-confidence too much, destroying the competition mechanism, technology research and development, and economic development problems.

Legal basis: Anti-Monopoly Law of the People's Republic of China Article 3 The monopolistic acts provided for in this Law include: (1) the business operator enters into a monopoly agreement; (2) Undertakings abusing their dominant market position; (3) Concentrations of undertakings that have or may have the effect of eliminating or restricting competition.

Legal analysis: the most significant impact is that monopoly enterprises because there is no competition, they can charge consumers higher at will, because there are no competitors in the market, and then the sky-high price, do not care about the quality of the product, service, etc., to see the big will also affect the development of the production of mountain search force, material circulation is hindered, over time will affect the fair competition and development of the whole society, if there is only one chicken farm in the country, then how much their chickens sell, you can only accept, Therefore, the state decisively punished Alibaba according to the provisions of the monopoly law, although the competitive pressure in all walks of life is very high, but because of competition can enterprises create better products and services, if every industry is monopolized under the operation of capitalists, then the final consumer who pays for this behavior is still the consumer. If an enterprise has no competitors and no pressure because of monopoly, it will become lazy, have no development motivation and excessive self-confidence, and destroy the competition mechanism, technology research and development, and economic development problems.

Legal Basis Omitted: Article 3 of the Anti-Monopoly Law of the People's Republic of China The monopolistic acts provided for in this Law include: (1) the undertakings reach an agreement on the balance of the situation; (2) Undertakings abusing their dominant market position; (3) Concentrations of undertakings that have or may have the effect of eliminating or restricting competition.

What's going on, I'm stuck here too.

Since the monopolist charges more than the marginal cost, it drives a wedge between the consumer's willingness to pay and the producer's cost.

The original words are like this, in the clouds.