Types of competition perfect imperfect. Perfect and imperfect competition: types, types and characteristics

Competition- This is a struggle between participants in economic activity for better conditions for production and marketing. Distinguish between perfect and imperfect competition.

Perfect Competition means that with full mobility (mobility) of resources and goods, there are many sellers and buyers of absolutely identical products who have complete market information and cannot impose their will on each other. The perfect competition market is actually an abstraction, since it is unlikely that at least one of the real markets corresponds to the described essence. If at least one of the conditions is violated, then imperfect competition. In imperfectly competitive markets, the degree of imperfection (ie, the ability to dictate one's own terms) depends on the type of market.

There are four main models (structures) of the market in terms of competition: these are pure competition, pure monopoly, monopolistic competition and oligopoly (the last three are imperfect competition).

Pure competition characterized by a large number

firms producing homogeneous (identical) products, the share of each firm in the market is very small, therefore they cannot influence the price, there are no barriers to entry into the market. Examples are the markets for agricultural products under the dominance of farms, foreign exchange markets, since the conditions on them are close to those of a perfectly competitive market.

Pure monopoly means that there is only one firm in the industry that produces a unique product that has no substitutes; the entrance to the industry is actually blocked, the firm's control over the price is significant, the maximum possible in market conditions. Examples include gas, water, electricity, transport, utilities. Barriers to entry of new participants in one or another of these industries are practically insurmountable. Monopoly can be natural or artificial.

A natural monopoly arises either when the production of a product requires unique natural conditions, or when the existence of several manufacturers in the industry is impractical. An artificial monopoly is created by the collusion of producers.

Along with pure monopoly, there is also pure monopsony. It occurs when there is only one buyer in the market. Monopoly benefits the seller, while monopsony benefits the buyer. There is also a bilateral monopoly, when there is one seller and one buyer in the industry. Such a situation, for example, is possible in the production of military products, when there is one manufacturing company and one customer of this product - the state. At the same time, the situation in the domestic market is considered. However, pure monopoly and pure monopsony are quite rare.

Monopolistic competition characterized by a large number of firms producing differentiated products. Differentiated products are products that satisfy the same need, but differ in quality, brand, packaging, after-sales service, etc. The market share of each firm is small, barriers to entry are easily overcome, and the ability of an individual firm to influence prices is narrowly limited. Examples are the production of clothing, shoes, books, retail, etc.

Oligopoly means that there are few (several) firms on the market that produce the same or differentiated products, the share of each firm in the market is significant, it is difficult to enter the industry. An oligopoly is characterized by a significant influence of an individual firm on the prices of goods and strong interdependence firms in their market behavior. Examples are the metallurgical industry, the automotive industry, and the production of household appliances.

The transition to imperfect competition, monopolistic and oligopolistic structures took place in a market economy at the end of the 19th century. based on the concentration and centralization of production and capital as a result of competition itself. The reasons for the emergence of monopolies include:

Scale effect: as a result, there are natural monopolies- industries in which the existence of a single firm is economically rational, since products can be produced by one firm at lower average costs than if it were produced by several firms;

Scientific and technological progress, i.e. development of new products, technologies, etc.;

Exclusive ownership of some productive resource, for example, establishing control over all oil fields;

Exclusive rights granted to the firm by the state.

Monopolies, seeking to maximize profits, may reduce production and raise prices for goods, which is contrary to the interests of buyers and society as a whole.

The competitive market environment must be guarded against the emergence of a pure monopoly or oligopoly. This can be achieved only with the intervention of the state, through the conduct of antimonopoly policy.

Antitrust policy includes support for small and medium-sized businesses, the dissemination of scientific and technical information, the assumption of reasonable competition from foreign firms, the adoption and implementation of antitrust laws. One of the first antitrust laws appeared in the USA in 1890 (Sherman law). Antitrust law covers two main areas:

Regulates the structure of the industry - market share controlled by one firm, and mergers firms, primarily horizontal(in one industry) and vertical(along the technological chain from the extraction of raw materials to its processing and delivery of finished products to the consumer);

haunts unfair competition, for example, collusion on prices, buying up the assets of one company by another through nominees, etc.

The main purpose of the use of public funds is to achieve an optimal combination of different types of competition and prevent one of them from suppressing others and thereby weakening the overall effectiveness of the competitive environment. The formation of normally functioning competitive markets requires an appropriate legislative framework and public institutions, an effective monetary policy, and measures to protect the interests of national producers in the world market. In modern Russian conditions, the problem of protecting the competitive environment is quite acute, since the monopoly in many industries has been preserved since the days of the USSR. On March 22, 1991, the Law of the RSFSR “On Competition and Restriction of Monopolistic Activity in Commodity Markets” was adopted, the first regulatory act in Russia aimed at promoting competition. This law is constantly being amended and supplemented as the market situation changes. The latest amendments were made on July 26, 2006. The Law and its addenda define the concepts of monopoly high and low prices, the concept of “dominant position” of an economic entity, etc. The law prohibits such entities from abusing their position in the market. Article 10 of the Law is focused on the suppression of unfair competition. Article 17 - to prevent monopoly and oligopolistic mergers. The extreme measure applied to business entities abusing their dominant position is the forced separation of business entities, as defined in Article 19.

The main difficulties in applying antitrust law are to determine the size of the market in which the company accused of monopoly operates and to prove the fact of unfair competition.

Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.

¨ Key features of a perfectly competitive market

It should be borne in mind that the features of perfect competition mentioned above are not fully inherent in any of the industries. In its pure form, the conditions of perfect competition do not occur in reality, that is, perfect competition is nothing but a model of an ideal market economy. Such models, reflecting phenomena in a "sterile pure" form, serve as an important tool for economic analysis. Individual industries can only approach the model to varying degrees.

Let us consider in turn the main features of perfect competition.

Under perfect competition, neither sellers nor buyers influence the market situation due to the smallness and multiplicity of all market participants. Sometimes both of these sides of perfect competition are combined, speaking of the atomistic structure of the market. This means that there are a large number of small sellers and buyers operating in the market, just as any drop of water is made up of a gigantic number of tiny atoms.

At the same time, purchases made by the consumer (or sales by the seller) are so small compared to the total volume of the market that the decision to lower or increase their volumes creates neither surpluses nor deficits. The aggregate size of supply and demand simply "does not notice" such small changes. So, if one of the countless beer stalls in Moscow closes, the capital's beer market will not become scarce, just as there will not be a surplus of this drink on it if one more "spot" appears in addition to the existing ones.

In order for competition to be perfect, the goods offered by firms must meet the condition of product homogeneity. This means that the products of firms in the view of buyers are homogeneous and indistinguishable, i.e. products of different enterprises are completely interchangeable (they are complete substitute goods). The economic meaning of this provision is as follows: goods are so similar to each other that even a small price increase by one manufacturer leads to a complete switch in demand for the products of other enterprises.

Under these conditions, no buyer would be willing to pay a hypothetical firm more than he would pay its competitors. After all, the goods are the same, customers do not care which company they buy from, and they, of course, opt for the cheapest. That is, the condition of product homogeneity actually means that the difference in prices is the only reason why the buyer can prefer one seller to another. That is why, under conditions of perfect competition, there is no reason for the existence of non-price competition.

Indeed, it is difficult to imagine that one seller of potatoes on the "collective farm" market will be able to impose on buyers a higher price for his product, if other conditions of perfect competition are observed. Namely, if there are many sellers, and their potatoes are exactly the same. Therefore, it is often said that under perfect competition, each individual seller "receives the price" prevailing in the market.

The next condition for perfect competition is the absence of barriers to entry and exit from the market. When there are such barriers, sellers (or buyers) begin to behave like a single corporation, even if there are many of them and they are all small firms. In history, this is exactly how the medieval guilds (shops) of merchants and artisans acted, when, according to the law, only a member of the guild (shop) could produce and sell goods in the city.

Nowadays, similar processes are taking place in criminalized business areas, which, unfortunately, can be observed in many markets of large Russian cities. All sellers follow well-known unofficial rules (in particular, they keep prices no lower than a certain level). Any outsider who decides to bring down prices, and simply trade "without permission", has to deal with bandits. And when, say, the Moscow government sends disguised police officers to the market to sell cheap fruit (the goal is to force the criminal "owners" of the market to show themselves and then arrest them), then it fights precisely for the removal of barriers to entering the market.

On the contrary, typical for perfect competition no barriers or freedom to enter to the market (industry) and leave it means that resources are completely mobile and move from one activity to another without problems. Buyers freely change their preferences when choosing goods, and sellers easily switch production to more profitable products.

There are no difficulties with the termination of operations in the market. Conditions do not force anyone to stay in the industry if it does not suit their interests. In other words, the absence of barriers means the absolute flexibility and adaptability of a perfectly competitive market.

The final condition for the existence of a perfectly competitive market is that information about prices, technology, and likely profits is freely available to everyone. Firms have the ability to quickly and rationally respond to changing market conditions by moving the resources used. There are no trade secrets, unpredictable developments, unexpected actions of competitors. That is, decisions are made by the firm in conditions of complete certainty in relation to the market situation or, what is the same, in the presence of perfect information about the market.

The above conditions actually predetermine that, under perfect competition, market entities are not able to influence prices.

Market entities under conditions of perfect competition can influence the general situation only when they act in agreement. That is, when some external conditions encourage all sellers (or all buyers) of the industry to make the same decisions. In 1998, the Russians experienced this first hand, when in the first days after the devaluation of the ruble, all grocery stores, without agreeing, but equally understanding the situation, unanimously began to raise prices for goods of a “crisis” assortment - sugar, salt, flour, etc. Although the increase in prices was not economically justified (these goods rose in price much more than the ruble depreciated), the sellers managed to impose their will on the market precisely as a result of the unity of their position.

Firms operating in conditions of perfect competition (they are called competitive) perceive the equilibrium price level that has developed in the market as a given one, which none of the firms can influence. Such firms are called price-takers (from the English price - price, take - take) in contrast to firms - price-makers (make - do), which affect the level of market prices.

An example of a market that is close to the conditions of perfect competition is the global frozen fish market. A single fish-catching firm accounts for 0.0000107% of the world's fish catch. This means that even a 2-fold increase in the volume of fish production by one firm would lead to a decrease in the world price of fish by only 0.00254%, i.e., it would practically not affect its level. Agriculture is also considered one of the industries closest to perfect competition.

A firm under perfect competition

To begin with, we will determine what the demand curve for the products of a firm operating in conditions of perfect competition should look like. First, the firm accepts the market price, i.e. the latter is a given value for it. Secondly, the firm enters the market with a very small part of the total amount of goods produced and sold by the industry. Consequently, the volume of its production will not affect the market situation in any way, and this given price level will not change with an increase or decrease in output.

Obviously, under such conditions, the demand curve for the firm's products will look like a horizontal line (see Fig. 1). Whether the firm produces 10 units, 20 or 1, the market will absorb them at the same price P.

From an economic point of view, the price line, parallel to the x-axis, means the absolute elasticity of demand. In the case of an infinitesimal price reduction, the firm could expand its sales indefinitely. With an infinitesimal increase in the price, the sale of the enterprise would be reduced to zero.

The presence of perfectly elastic demand for the firm's product is called the criterion of perfect competition. As soon as this situation develops in the market, the firm begins to behave like a perfect competitor. Indeed, the fulfillment of the criterion of perfect competition sets many conditions for the company to operate in the market, in particular, determines the patterns of income.

Income (revenue) of the firm is called payments received in its favor when selling products. Like many other indicators, economic science calculates income in three varieties. total income(TR) name the total amount of revenue that the company receives. Average income (A R) reflects revenue per unit of product sold, or (which is the same) total revenue divided by the number of products sold. Finally, marginal revenue(MR) represents the additional income generated from the sale of the last unit sold.

A direct consequence of the fulfillment of the criterion of perfect competition is that the average income for any volume of output is equal to the same value - the price of the goods and that marginal income is always at the same level. Let's say, if the market price of a loaf of bread equals 8 rubles, then the bread stall acting as a perfect competitor accepts it regardless of the volume of sales (the criterion of perfect competition is fulfilled). Both 100 and 1000 loaves will be sold at the same price per piece. Under these conditions, each additional loaf sold will bring the stall 8 rubles. (marginal income). And the same amount of revenue will be on average for each loaf sold (average income). Thus, equality is established between average income, marginal income and price (AR=MR=P). Therefore, the demand curve for the products of an individual enterprise in conditions of perfect competition is simultaneously the curve of its average and marginal revenue.

As for the total income (total revenue) of the enterprise, it changes in proportion to the change in output and in the same direction (see Fig. 1). That is, there is a direct, linear relationship: T R=P Q .

If the stall in our example sold 100 loaves of 8 rubles each, then its revenue, of course, will be 800 rubles.

Graphically, the curve of total (gross) income is a ray drawn through the origin with a slope: tg a = DTR/DQ = MR = P.

That is, the slope of the gross income curve is equal to marginal revenue, which in turn is equal to the market price of the product sold by the competitive firm. From this, in particular, it follows that the higher the price, the steeper the straight line of gross income will go up.

The goal of any firm is profit maximization. Profit (p) is the difference between total revenue (TR) and total costs (p) for the sales period:

p = TR - TC = PQ - TC.

It is easy to see that of the three variables on the right side of the equation, the main lever for controlling the volume of profit for the firm is the volume of production. Indeed, the price (P) is a constant under perfect competition, that is, it does not change. This is an external condition of the company's activity, which must be reckoned with, and not a factor that can be controlled. As for the costs (TC), they themselves largely depend on the volume of production. In other words, under conditions of perfect competition, the most important decisions of the firm are primarily related to the establishment of the optimal volume of production. But first it is necessary to find a criterion for the expediency of production.

Like many other indicators, this criterion is not the same for the short and long term.

If we talk about the long-term period, then it is obvious that such the criterion will be the presence of non-negative economic profit(p>0). If economic losses appear in the long run, the owners of the company resort to its liquidation, i.e. to the closure and sale of the property. However, even if the owners of a loss-making company do not want to close it (say, persistently hoping for an improvement in the future), the closing is often carried out against their will. Indeed, in order to continue production, a long-term loss-making firm has to make loans that it cannot repay. Sooner or later, such a policy leads to bankruptcy (or insolvency), that. e. to the inability of the enterprise to pay its obligations. After the company is declared bankrupt (in court), the former owners are removed from managing it, and the property is sent to cover debts to creditors.

The institution of bankruptcy is one of the most important mechanisms for ensuring the social responsibility of entrepreneurs in a market economy. Having the freedom of entrepreneurship, i.e., the right to make any (legitimate) economic decisions solely at their own discretion, capitalists must pay for possible mistakes with the loss of their property. The threat of bankruptcy and the forced deprivation of property associated with it disciplines the entrepreneur, keeps him from adventurous projects, failure to fulfill obligations to partners, imprudent attraction of borrowed funds without the possibility of returning them.

In Russia, after the default of 1998, a wave of bankruptcies swept the country. Over 4,500 bankruptcy cases were initiated by arbitration courts in 1998, many times more than in all previous years combined. The list of large enterprises that went bankrupt is impressive: in metallurgy, these are the legendary ZapSib, Volzhsky Pipe Plant, KMK, etc.; in the energy sector, Kuzbassenergo, Pechorskaya, Nevinnomysskaya and Stavropolskaya State District Power Plants, Prokopyevskugol, Krasnoyarskugol; Soviet-era audio equipment manufacturer Vega (Berdsk), Novocherkassk Electric Locomotive Plant, Irbit Motorcycle Plant. Even in the “prosperous” oil industry, the bankruptcy procedure for the fifth largest company in the country, Sidanco, began. .

At first glance, it may seem that making a profit will determine the decision on the feasibility of production in the short run. However, in reality the situation is more complicated. Indeed, in the short term, part of the company's costs is permanent and does not disappear when production stops. For example, the rent for the land on which the enterprise is located will have to be paid regardless of whether the plant is idle or working. In other words, losses to the firm are guaranteed even in the event of a complete cessation of production.

The firm will have to weigh when the losses will be less. In the event of a complete shutdown of the plant, there will be no income, and the costs will exactly equal the fixed costs. If production continues, variable costs will be added to fixed costs, but income from the sale of products will also appear.

Thus, under unfavorable conditions, the decision to temporarily stop production is made not at the moment when profits disappear, but later, when the losses from production begin to exceed the value of fixed costs. The criterion for the feasibility of production in the short run is that losses do not exceed the size of fixed costs(|p|< TFC).

This theoretical position is fully consistent with economic practice. No one stops production when there are temporary losses. During the financial crisis of 1998. the share of unprofitable industrial enterprises in Russia has grown, for example, to 51%. But hardly anyone would consider the best way out of a difficult situation to stop half of the country's industry.

Thus, for a firm operating in the short run, there are three possible behaviors:

1. production for profit maximization;

2. production for the sake of minimizing losses;

3. termination of production.

Graphical interpretation of all three options is shown in fig. 2.

The figure shows the standard dynamics of the gross total costs of a certain firm and three variants of curves (more precisely, direct) of gross income that will develop: TR1 - at a high level of prices for the company's products, TR2 - at an average price level and TR3 - at a low one. As already noted, the gross income curve rises the steeper the higher prices.

It is easy to see that the gross income curve only in the first case (TR1) turns out to be on a certain section higher than the gross cost curve (TC). It is in this case that the firm will make a profit, and it will choose the level of production where the profit is maximum. Graphically, this will be the point (Q1) where the TR1 curve is above the TC curve by the maximum distance. The amount of profit (p1) is highlighted in fig. 2 with a thick line.

In the second case (TR2), the income curve is below costs throughout its entire length, i.e. there can be no profit. However, the gap between both curves - and this is how the size of the loss is graphically reflected - is not the same. Initially, the losses are significant. Then, as production grows, they decrease, reaching their minimum (p2) with the release of Q2 units of output. And then they start growing again. It is obvious that the release of Q2, units of production under these conditions is optimal for the firm, since it ensures that it minimizes losses.

Finally, in the third case, the gap between costs and income (curve TR3) only increases with the growth of production. In other words, losses increase monotonically. In this situation, it is better for the firm to stop production, resigned to the inevitable losses in this case in the amount of gross fixed costs (p3).

However, the termination of production does not mean the liquidation of the enterprise (firm). It's just that the company is forced to temporarily stop production. It will stand until the market price increases to such a level that production begins to acquire some meaning. Or the company will be convinced of the long-term nature of the price reduction and will finally cease to exist.

Examples of such situations are temporary shutdowns of Russian enterprises for several months or even years, which, unfortunately, is not uncommon during the years of reforms. Either AZLK (“Moskvich”) stops production, then ZIL, or even the manufacturer of seemingly popular goods - the Mars factory near Moscow, which produces chocolate bars. There is no need to talk about countless stops of small enterprises against such a background.

Temporary stoppages of production in Russia have a certain specificity compared to those described in the theory. Namely, the low price, as a rule, is not formally their reason. The fact is that, according to our law, the sale of products below cost is simply prohibited, i.e., not only the situation P< АVСmin, но и куда более мягкий случай АТСmin >P > AVCmin can never add up. The factory always charges a price above this level.

But the objective law of economics cannot be canceled with the help of a legal norm. When the real market price falls below the cost, the company's products at the higher price assigned to them cease to be bought. Under these conditions, the company usually takes hidden forms, lowering prices. Namely, he agrees to a delay in payment, accepts less favorable proportions of the exchange of his products for other goods in barter transactions, etc. Most importantly, a lot of unsold products accumulate in the warehouse.

Stopping the enterprise in these conditions allows saving on variable costs (temporarily not paying wages, not purchasing raw materials, etc.). And during this time, wait for the receipt of money from their debtors and sell off the surplus of finished products.

So far, we have talked about competition only as a positive factor, but we should not idealize the market of perfect competition. Indeed, no type of imperfect competition has a set of properties characteristic of perfect competition: the minimum level of costs, the optimal allocation of resources, the absence of shortages and surpluses, the absence of excess profits and losses. In fact, when economists talk about self-regulation of the market, which automatically brings the economy to an optimum state - and such a tradition goes back to Adam Smith, we can talk about perfect competition and only about it.

However, perfect competition is not without a number of disadvantages:

1. Small businesses typical of this type of market are often unable to use the most efficient technique. The fact is that economies of scale are often available only to large firms.

2. The market of perfect competition does not stimulate scientific and technological progress. Indeed, small firms usually do not have enough funds to finance long and expensive research and development projects.

3. A purely competitive economy may not provide a sufficient range of consumer choice or new product development. Pure competition leads to the standardization of products, while other market structures (such as monopolistic competition and often oligopoly) produce a wide range of types, styles, and qualities of any product. This differentiation of the product expands the range of free choice of consumers and at the same time allows the most complete satisfaction of the preferences of the buyer. Critics of pure competition also point out that since it is not progressive in terms of the development of new production techniques, this market model is not conducive to the improvement of existing products and the creation of new ones.

Thus, for all its merits, the market of perfect competition should not be an object of idealization. The small size of companies operating in a perfectly competitive market makes it difficult for them to operate in a modern world full of large-scale technology and permeated with innovative processes.

¨ Common features of imperfect competition

The vast majority of real markets are markets of imperfect competition. They got their name due to the fact that competition, and hence the spontaneous mechanisms of self-regulation (the "invisible hand" of the market) act on them imperfectly. In particular, the principle of the absence of surpluses and deficits in the economy, which just testifies to the efficiency and perfection of the market system, is often violated. As soon as some goods are in excess, and some are not enough, it is no longer possible to assert that all the available resources of the economy are spent only on the production of the necessary goods in the required quantities.

The prerequisites for imperfect competition are:

1. a significant market share from individual manufacturers;

2. the presence of barriers to entry into the industry;

3. heterogeneity of products;

4. imperfection (inadequacy) of market information.

As we will see later, each of these factors individually and all of them together contribute to the deviation of the market equilibrium from the point of equality of supply and demand. So, the only manufacturer of a certain product (monopolist) or a group of large firms conspiring among themselves (cartel) are able to maintain inflated prices without the risk of losing customers - they simply have nowhere else to get this product.

As in the case of perfect competition, in imperfect markets one can single out the main criterion that allows one or another market to be classified in this category. The criterion for imperfect competition is a decrease in the demand curve and prices with an increase in the firm's output. Another wording is often used: The criterion for imperfect competition is the negative slope of the demand curve ( D) on the company's products.

Thus, if under conditions of perfect competition the volume of a firm's output does not affect the price level, then under conditions of imperfect competition such an effect exists (this can be clearly seen in Fig. 3).

The economic meaning of this pattern is that a firm can sell large volumes of products with imperfect competition only by reducing prices. Or put another way: the behavior of a firm is significant across the industry.

Indeed, under perfect competition, the price remains the same, no matter how many products a firm produces, because its size is negligibly small compared to the total market capacity. Whether the mini-bakery doubles, keeps it at the same level, or completely stops baking bread, the general situation on the Russian food market will not change in any way and the price of bread will remain its value.

On the contrary, the existence of a relationship between production volumes and the price level directly indicates the importance of the firm in terms of the market. If, say, AvtoVAZ halves the supply of Zhiguli, then there will be a shortage of cars and prices will jump. And so it is with all varieties of imperfect competition. Another question is that not only size, but also other factors, in particular, the uniqueness of products, can give importance to a company. But the relationship between the volume of output and the price level is always observed, if it is really a market of imperfect competition.

¨ The main features of the market of monopolistic competition

Monopolistic competition is a form of imperfect competition. Monopolistic competition is a market structure in which a large number of firms produce interchangeable goods and services.

First of all, the term “monopolistic competition” draws attention to itself. He says that within the framework of this market structure, the features inherent in monopoly and perfect competition, which are antipodes, are combined. Monopolistic competition is related to perfect competition by a large number of sellers simultaneously acting on the market for a given product or service. But they offer not the same, but differentiated products, that is, various interchangeable products that satisfy the same need (different types of soap, toothpaste, clothing models, economics textbooks, etc.). Each type of product in relatively small sizes can be produced by small firms. For example, there are many firms in the toothpaste market, but each of them produces a separate type of toothpaste and is a monopolist in its release. Any such firm has a competitor who is trying to take away the consumer from it and offer him a different kind of toothpaste. Therefore, all firms that produce toothpaste are competitors, despite the fact that they sell different types of toothpaste. It is no coincidence that they pursue an active advertising policy.

Using its position as a relative monopolist, the firm can afford to increase the price of its products, which a competitive firm cannot do under the threat of completely losing customers. In the context of offering differentiated products, many of the buyers will still not leave the market, since the seller takes into account their individual needs. For example, women of fashion will not stop making clothes at "their" tailor, even if he raises prices a little; the client of the hairdressing salon will also not leave "his" master in such a case. Unlike an oligopolist, a firm operating under conditions of monopolistic competition does not take into account the response of competitors to its actions, since this is impossible to do in a large number of firms.

There are many firms operating on the market, and among them there are either no large ones at all, or they do not have decisive advantages over small ones and coexist with them. The barriers to entry into such a market are relatively low: opening an upholstered furniture workshop or a fashionable hairdressing salon does not require large capital, and it is difficult for competitors to prevent this. Quitting the market is usually easy - there are always buyers ready to buy a small business.

Why, under such liberal conditions prevailing in markets of the type described, is competition still not perfect? The reason lies in the diversity, differentiation of the product.

The product produced by each company is somewhat different from the products of other companies. Any of the producers occupies a kind of position of a "mini-monopolist" (the only manufacturer of a specific narrow variety of a given product) and has a certain power in the market.

Each firm operating under monopolistic competition controls only a small share of the entire market for the corresponding product. However, product differentiation leads to the fact that the single market breaks up into separate, relatively independent parts (they are called market segments). And in such a market segment, the share of even a small company can become very large.

The enormous difficulties of Russian enterprises in adapting to the conditions of a market economy are a generally recognized fact. In some cases, the source of problems lies in the low differentiation of their products.

The fact is that in the Soviet era, enterprises produced everything according to uniform standards and technologies. Moreover, the assortment was extremely narrow: about a dozen varieties of cars were produced in the country, about the same number of TV sets, sausages, cheese, etc. Because of this, in a market economy, domestic enterprises were doomed to a tough competitive confrontation.

Product differentiation arises from the existence of differences between them in quality, service, advertising. Let's take a closer look at each of these product differentiation factors.

First of all, we emphasize that quality is not a one-dimensional characteristic, i.e. is not limited only to the assessment, a bad product or a good one. Even the basic consumer properties of the simplest products are surprisingly diverse. So, toothpaste should: a) clean teeth, b) disinfect the oral cavity, c) strengthen tooth enamel, d) strengthen gums, e) taste good, etc.

And all these properties, only as an exception, can be harmoniously combined in one product. In many cases, a gain in one feature of a product inevitably leads to a loss in another. In this example, the introduction of effective detergents and disinfectants into the composition of the paste irritates the gums; the best medical pastes are rarely palatable. Therefore, already the choice of priorities in the main consumer qualities opens up opportunities for a wide variety of products. And they all become unique in their own way: one paste strengthens the gums better, the other tastes better, etc.

The basis for differentiation can also serve as additional consumer properties, i.e. those features of the product that affect the ease or convenience of its use (for example, different packaging sizes, differences in packaging, etc.).

At the same time, practice shows that in a mature, saturated market, it is additional properties that determine the fate of goods. This, in particular, can be easily traced by observing the zigzags in the development of the market in post-reform Russia. For example, in the conditions of the commodity famine of 1991-1992. butter, if it appeared on sale, was usually in bulk or in random packages, namely in the form in which the given consignment of humanitarian aid arrived. With the saturation of the market by 1997, bright foil packages with oil packages of 200, 250 and 500 g became typical, occasionally there was solid (in plastic boxes) and souvenir packaging (barrels of Vologda oil). Manufacturers sought to improve the chances of selling their products by creating additional convenience for customers: someone needs a small pack, someone is more comfortable with a large one, and someone even wants to take a souvenir from Russia. Excessive demand after the devaluation of 1998 sharply reduced the saturation of the market and returned half-forgotten bulk butter to the shelves.

An important quality characteristic of a product is its location. For retail and many types of services, it is generally crucial. So, if the network of gas stations is rare, then the nearest gas station automatically becomes a monopolist in this area.

Finally, even imaginary qualitative differences between them can serve as the basis for product differentiation. For a long time, in particular, it has been known that a significant percentage of smokers on test trials are unable to distinguish “their” brand from others, although they always buy only it. Thus, from the point of view of the market behavior of the consumer, it does not matter whether the goods are really different. The main thing is that he thinks so.

Differences in service unite the second (after quality) large group of product differentiation factors. The fact is that for a wide group of products, especially for technically complex consumer goods and many industrial goods, the long-term nature of the relationship between the seller and the buyer is characteristic. An expensive car should work properly not only at the time of purchase, but throughout its entire service life.

The full cycle of service includes pre-sales service (assistance in choosing the right product; for industrial goods, this often involves conducting a whole study); service at the time of purchase (checking, delivery, adjustment) and after-sales service (warranty and post-warranty repairs, making ongoing improvements, advice on optimal operation).

Each of these operations can be performed to a different extent (or not performed at all). As a result, one and the same product, as it were, decomposes into a whole range of varieties that differ sharply in their service characteristics and therefore turn into completely different goods. Such a phenomenon can now be observed, in particular, in the Russian computer market, where a limited number of types of computers are offered under different conditions and at very different prices.

The third major group of product differentiation factors is related to advertising.

Secondly, it contributes to the formation of new needs. An example is the promotion of disposable baby diapers to the Russian market. It was advertising that revealed their convenience for parents and benefits for the child, instantly creating a significant market.

Third, advertising creates product differentiation where there is no real difference between them. As already noted, in the cigarette market, many qualitative differences are imaginary. Behind the imaginary differences in quality, very often very real differences in the advertising presentation of the goods are hidden.

Product differentiation provides firms with certain monopolistic advantages. But the situation has another interesting side. We said earlier that access to an industry in which conditions of monopolistic competition have developed is relatively free. Now let's clarify this formulation: entry into such a market is not blocked by any other barriers, with the exception of barriers associated with product differentiation.

In other words, product differentiation not only creates advantages for the company, but also helps protect them from competitors: it is not so easy to accurately replicate the delicate taste of the famous liquor or even find an equivalent response to a successful advertising campaign. Therefore, firms deliberately create and maintain differentiation, thereby achieving additional profits for themselves and along the way (regardless of their will - remember the principle of the "invisible hand") providing a variety of goods on the country's market.

¨ The role of non-price competition

In no other market structure does non-price competition play such an important role as in monopolistic competition.

Of the two main types of competition - price and non-price - our enterprises, on extremely unfavorable terms, were involved in the most severe of them, namely price competition. Firms that conduct price competition try to attract consumers by setting prices lower than those of their rivals. Accordingly, profits are reduced, and if the price falls below costs, then losses appear. At the same time, domestic enterprises (especially when trying to enter foreign markets) often have to compensate for the lag in product quality due to low prices.

On the contrary, with non-price competition, firms seek to attract buyers not by lowering prices, but by increasing the consumer value of the goods. This can be achieved in many ways: by improving the quality of a product, by better adapting it to the needs of a particular group of consumers, by creating a fundamentally new type of product, by improving service, by intensifying advertising, etc. At the same time, product differentiation is the basis for non-price competition.

Until the post-war period, of the two types of competition all over the world, the price one noticeably prevailed. At present, however, the situation has changed, and non-price competition has come to the fore. This is due to a number of advantages that this type of competition provides to the firms conducting it.

First, price fights have proved unprofitable for all participants in the struggle, and they are especially destructive for small and medium-sized firms. (Namely, in comparison with Western giants, Russian enterprises are for the most part.) The fact is that the larger the company, the more significant financial resources it has and the longer it can sell goods at reduced prices. Under these conditions, the price war hits the most vulnerable places of the domestic industry weakened by the crisis.

Secondly, in the conditions of a modern highly developed economy, the demands of consumers have become more complicated. The market began to favorably accept numerous and varied variations of goods, it became possible to attract consumers with increased quality, special properties of a product or service, etc. The special properties of a product are often more important than price attractiveness. That is, successful product differentiation is often a way of avoiding any competition in general, leaving for a completely free market niche.

Thirdly, the cost of non-price competition, if done correctly, is cheaper for the firm than the cost of price competition. Indeed, a decrease in prices below the optimal level always leads to a decrease in profits, and the decrease is all the stronger, the greater the reduction in prices. The relationship between measures of non-price competition and profit is much more complicated. A good commercial can cost as much as a bad one. The advantage of the first over the second may well be achieved not due to expensive shooting techniques, but due to the interesting idea of the film, its greater intelligibility, etc. The same goes for product improvements: a small and therefore inexpensive design change, if well conceived, can make a product much more user-friendly. As a result, the growth of competitiveness will be achieved without high costs.

From the above, of course, it does not follow that non-price competition is feasible without any costs at all - good advertising or a high quality product also costs a lot of money. But the field of activity of the company, no doubt, is wider than with price competition. There is always hope to beat the competitor with the best ideas. For example, using the advantages of the Russian engineering school and the huge scientific potential of the country.

Finally, fourthly, price competition in our time in most countries, including Russia, is limited by law. Price reduction should not reach the level of dumping, i.e. the price cannot fall below the cost price.

¨ The main features of the oligopolistic market

Oligopoly is one of the most common market structures in the modern economy. In most countries, almost all branches of heavy industry (metallurgy, chemistry, automotive, electronics, ship and aircraft building, etc.) have just such a structure.

An oligopoly is a market structure in which there are a small number of selling firms in the market for a product, each of which has a significant market share and considerable price control. However, one should not think that companies can literally be counted on the fingers. In an oligopolistic industry, as in monopolistic competition, there are often many small firms along with large ones. However, a few leading companies account for such a large part of the industry's total turnover that it is their activities that determine the course of events.

Formally, oligopolistic industries usually include those industries where several largest firms (in different countries, from 3 to 8 firms are taken as a reference point) produce more than half of all output. If the concentration of production is lower, then the industry is considered operating in conditions of monopolistic competition.

The main reason for the formation of an oligopoly is economies of scale. An industry acquires an oligopolistic structure if the large size of the firm provides significant cost savings and, therefore, if large firms in it have significant advantages over small ones.

It is customary to say that oligopolistic industries are dominated by the Big Two, Big Three, Big Four, etc. More than half of sales come from 2 to 10 firms. For example, in the United States, four companies account for 92% of the production of all cars. Oligopoly is characteristic of many industries in Russia. Thus, passenger cars are produced by five enterprises (VAZ, AZLK, GAZ, UAZ, Izhmash). Dynamic steel is produced by three enterprises, 82% of tires for agricultural machines - by four, 92% of soda ash - by three, the entire production of magnetic tape is concentrated in two enterprises, motor graders - in three.

Light and food industries stand in sharp contrast to them. In these industries, the largest 8 firms account for no more than 10%. The state of the market in this area can be confidently characterized as monopolistic competition, especially since product differentiation in both industries is exceptionally large (for example, the variety of varieties of sweets that are produced not even by the entire food industry, but only by one of its sub-sectors - the confectionery industry).

But it is not always possible to judge the structure of the market on the basis of indicators relating to the entire national economy. So, often certain firms that own an insignificant share of the national market are oligopolistic in the local market (for example, shops, restaurants, entertainment enterprises). If the consumer lives in a big city, he is unlikely to go to the other end of the city to buy bread or milk. Two bakeries located in the area of his residence may be oligopolists.

Of course, the establishment of a quantitative boundary between oligopoly and monopolistic competition is largely arbitrary. After all, the two named types of market have other differences from each other.

Products in the oligopolistic market can be either homogeneous, standardized (copper, zinc, steel) or differentiated (cars, household appliances). The degree of differentiation affects the nature of competition. For example, in Germany, car factories usually compete with each other in certain classes of cars (the number of competitors reaches nine). Russian car factories practically do not compete with each other, since most of them are specialized in a narrow field and turn into monopolists.

An important condition affecting the nature of individual markets is the height of the barriers that protect the industry (the amount of initial capital, the control of existing firms over new technology and the latest products with the help of patents and technical secrets, etc.).

The fact is that there can never be many large firms in an industry. Already the multibillion-dollar value of their plants serves as a reliable barrier to the entry of new companies into the industry. In the usual course of events, a firm becomes larger gradually, and by the time an oligopoly is formed in the industry, a narrow circle of largest firms has actually been determined. In order to invade it, one must immediately have such an amount that the oligopolists have gradually invested in the business over decades. Therefore, history knows only a very small number of cases when a giant company was created “from scratch” through one-time huge investments (Volkswagen in Germany can be considered an example, but in this case the state acted as an investor, i.e. non-economic factors).

But even if funds were found for the construction of a large number of giants, they would not be able to work profitably in the future. After all, the market capacity is limited. Consumer demand is enough to absorb the products of thousands of small bakeries or auto repair shops. However, no one needs metal in quantities that could smelt thousands of giant domains.

There are significant limitations in the availability of economic information in this market structure. Each market participant carefully guards trade secrets from its competitors.

A large share in output, in turn, provides oligopolistic firms with a significant degree of control over the market. Already each of the firms individually is large enough to influence the position in the industry. So, if the oligopolist decides to reduce output, this will lead to an increase in prices in the market. In the summer of 1998, AvtoVAZ took advantage of this circumstance: it switched to working in one shift, which led to the dispersal of unsold car stocks and allowed the plant to raise prices. And if several oligopolists begin to pursue a common policy, then their joint market power will come close to that possessed by a monopoly.

A characteristic feature of the oligopolistic structure is that firms, when forming their pricing policy, must take into account the reaction of competitors, that is, all producers operating in the oligopolistic market are interdependent. With a monopolistic structure, such a situation does not arise (there are no competitors), with perfect and monopolistic competition - also (on the contrary, there are too many competitors, and it is impossible to take into account their actions). Meanwhile, the reaction of competing firms can be different, and it is difficult to predict it. Let's say that a firm in the domestic refrigerator market decides to cut the price of its products by 15%. Competitors may react to this in different ways. First, they can cut prices by less than 15%. In this case, this company will increase the sales market. Secondly, competitors can also reduce prices by 15%. The volume of sales will increase for all firms, but due to lower prices, profits may decrease. Thirdly, a competitor may declare a "price war", that is, reduce prices even more. The question then becomes whether to accept his challenge. Usually, large companies do not enter into a “price war” between themselves, since its outcome is difficult to predict.

Oligopolistic interdependence - the need to take into account the reaction of competing firms to the actions of a large firm in an oligopolistic market.

Any model of an oligopoly must proceed from taking into account the actions of competitors. This is an additional significant limitation, which must be taken into account when choosing a behavior pattern for an oligopolistic firm. Therefore, there is no standard model for determining the optimal volume of production and the price of products for an oligopoly. It can be said that determining the pricing policy of an oligopolist is not only a science, but also an art. Here, the subjective qualities of a manager play an important role, such as intuition, the ability to make non-standard decisions, take risks, courage, determination, etc.

¨ Varieties of oligopoly

The oligopolistic structure can be very different, each of its varieties leaves its mark on the development of the company's pricing policy. The number and size of firms in the industry, the nature of products, the degree of technology renewal, etc. play a role. Consider some of the options for the market behavior of oligopolistic firms.

Uncoordinated oligopoly, in which firms do not enter into any contacts with each other and do not consciously try to find a point of equilibrium that suits everyone.

Cartel (or collusion) of firms, which does not eliminate their production and marketing independence, but provides for an agreement between them on a number of issues. First of all, cartel agreements include uniform, monopolistically high prices at which cartel members undertake to sell their goods on the market.

The cartel agreement also provides for the division of the sales market. This means that each member of the cartel undertakes to sell their goods, for example, only in certain territories.

In addition, in order to be able to keep high prices, the supply of goods on the market is often limited, and this requires limiting the size of production. Therefore, cartel agreements often provide for the determination of the share in the production of various goods for each member of the cartel.

Collusion can be both secret and legal. In many European countries cartels are allowed, in Russia and the USA they are prohibited by law. There are many international cartels, the most famous of which is OPEC (Organization of the Petroleum Exporting Countries).

Let's assume that the firms - members of the cartel - decided to set a single price for their products. To do this, it is necessary to construct a marginal cost curve for the cartel as a whole. Then it is possible to determine the optimal volume of production in the cartel, which allows maximizing the total profit. In other words, the cartel acts as a monopolist. But the most difficult problem is the distribution of sales between the parties to the cartel agreement. In an effort to maximize profits, the cartel must set quotas in such a way that the total costs are minimal. But in practice, it is rather difficult to implement such an establishment of quotas. The problem is solved by conducting complex negotiations, during which each company seeks to "bargain" for itself the best conditions, to outwit partners. Often, firms with higher costs manage to get large quotas, which does not solve the problem of profit maximization. In fact, markets are usually divided geographically or according to the prevailing volume of sales.

The creation of cartels runs into serious obstacles. It's not just antitrust laws. Agreements are often difficult to reach due to the large number of firms, significant differences in the range of products, the level of costs. Usually, a cartel member is tempted to break the agreement and make a big profit. Due to the legal prohibition, cartels do not officially exist in modern Russia. However, the practice of one-time price collusion is very widespread. It suffices to recall how periodically there is a shortage of either butter or sunflower oil, or gasoline on the consumer market. And how then these goods reappear with greatly increased prices at all sellers at the same time.

Quite often, various associations, such as tea importers, juice producers, etc., try to carry out functions close to cartel on a more permanent basis. In October 1998, for example, the State Antimonopoly Committee of the Russian Federation launched an investigation into the increase in gasoline prices by members of the Moscow Fuel Association, which unites about 60 gas station owners and controls 85-90% of gasoline sold in Moscow.

However, the future is even more fearful in this sense. The high concentration of production, the inability to win over customers by market methods, the close contacts established in the pre-reform era by all enterprises in the main industries, and a number of other factors favor the mass emergence of cartels. If the development of events really goes according to this scenario, the economy could be seriously damaged. Its prevention is therefore an important task of state economic policy.

Cartel-like market structure(or "playing by the rules"), in which firms deliberately make their behavior understandable and predictable for competitors, which makes it easier for the industry to achieve equilibrium or a state close to it.

Firms do not enter into agreements with each other, but subject their behavior to certain unwritten rules. Such a policy, on the one hand, makes it possible to avoid legal liability arising from anti-cartel legislation. And on the other hand, to reduce the risk of unpredictable reactions of competitors, i.е. protect yourself from the main danger inherent in an uncoordinated oligopoly. "Playing by the rules" facilitates the achievement of oligopolistic equilibrium.

The most commonly used technique of "playing by the rules" is price leadership. It consists in the fact that all large price changes are first carried out by one firm (usually the largest), and then they are repeated in similar sizes by other companies. The price leader actually single-handedly determines prices (and hence the volume of production) for the entire industry. But he does it in such a way that the new prices suit the rest. After all, if they are unprofitable for competitors, then they simply will not follow the leader and the industry will move into a state of uncoordinated oligopoly that is dangerous for all participants. Not coincidentally, therefore, the leader often "probes" the attitude of competitors, publicizing in advance the size of the upcoming change and listening to the reaction of other firms.

Price leadership is very common in the West, and today it can be seen in Russia, for example, in the automotive industry. The Russian automotive industry is a classic example of an oligopoly. In general, there are few independent car manufacturers in the country (about a dozen), and there are even fewer large firms that have a significant impact on the market. So, in the production of passenger cars there are only three of them - AvtoVAZ, GAZ and AZLK.

In 1991-1992 the leader in prices for passenger cars has always been the largest manufacturer - AvtoVAZ. And AZLK and GAZ followed him. It was a time of hyperinflation, when everything went up in price. The speed of price increases was decisive. And AvtoVAZ set a very fast pace. There were economic opportunities for this. With the beginning of social stratification, almost the first purchase of rich people was just a car. In addition, many cars were bought by new private firms, where mobility is the main key to success.

AvtoVAZ's leadership in prices actually came down to their fastest increase, which was quite suitable for other manufacturers as well. At the turn of 1993, however, AZLK and GAZ refused to repeat the next doubling of prices after the leader. The fact is that the Zhiguli at that time were competitive abroad and AvtoVAZ could focus on higher prices abroad. Having raised prices within the country and, accordingly, having lost part of Russian consumers, he did not lose anything - the released cars were exported and brought even large profits to the plant. On the contrary, the sale of "Moskvich" and "Volga" abroad was small. Their producers had to take into account the purchasing power of Russians to a greater extent. And they stopped raising prices.

VAZ-2109 has become noticeably more expensive than the Volga and almost three times more expensive than the Moskvich. As a result, AvtoVAZ had its first sales problems. The lesson was not in vain: in the same 1993, the growth rate of prices for Zhiguli dropped sharply.

The main factor in subsequent years was the gradual loss of international competitiveness of Russian cars. First, the Zhiguli were forced to leave foreign markets. Then, despite the protective customs duties, foreign cars began to push them in Russia.

A new turn in the situation was caused by the devaluation of the ruble. It made foreign cars prohibitively expensive and paved the way for higher prices for domestic cars. Frightened by recent sales difficulties, AvtoVAZ this time refused to play the role of a leader in their increase. It was taken over by AZLK, which by that time had managed to significantly improve the quality of the cars it produced. Thus, the system of leadership in prices was restored in the industry again.

¨ The main features of a monopoly

Monopoly is the most striking manifestation of imperfect competition. Strictly speaking, in conditions of monopolization of the market, the very existence of competition can be recognized only with great reservations. After all, competition presupposes the division of economic power, the choice of the consumer. That is why the competition between manufacturers for the demand of the consumer begins, there is a desire to satisfy his needs in the best possible way. In conditions of monopoly, consumers are opposed by a single giant producer. Whether the consumer wants it or not, he forced use the monopolist's products, agree to its price terms, etc.

The omnipotence of the monopolist is helped by the uniqueness (indispensability) of the latter's products. Can a resident of Moscow or Vladivostok voluntarily refuse the services of a monopoly supplier of electricity, replacing it with something in the household? Are the coal enterprises of Kuzbass able to transport their products without the help of the railway? The negative answer to such questions is obvious, as well as the fact that such a provision allows the monopolist to dictate its terms from a position of strength.

Strengthens the power of the monopolist over the market and the completeness of the information available to him. Serving all consumers of the industry, he knows exactly the size of the market, he can quickly and with absolute accuracy track changes in sales volumes and, of course, he is aware of the prices in detail, which he himself sets.

It is clear that the combination of all these circumstances creates an exceptionally favorable environment for the monopolist and favorable prerequisites for making super profits. It is obvious, however, that these advantages would instantly disappear if at least one more competitor manufacturer appeared in the industry. The monopolist would immediately have to move from diktat in relation to the consumer to scrupulous consideration of the needs and interests of the latter.

The current generation of Russians, who have experienced the collapse of state monopoly, will easily find a lot of everyday examples of such changes. Stale bread, for example, which until recently reigned supreme in bakeries, instantly became a rarity after the monopoly supply system was replaced by competition from a mass of independent bakeries.

That is why the monopolistic structure of the market, where it exists, is protected by a whole system of practically irresistible barriers to entry into the industry by independent competitors. The main barriers that exist in the monopolistic industry are:

1. the advantages of large-scale production (up to a natural monopoly);

2. legal barriers (monopoly ownership of sources of raw materials, land, rights to scientific and technological achievements, exclusive rights sanctioned by the state);

3. unfair competition.

Let's take a closer look at these types of barriers.

As in an oligopolistic market, in a monopolized industry only large enterprises . Monopoly chances exist only where size creates large cost advantages. This position of the theory has been repeatedly verified by practical experience.

The fact is that the high profits of monopolists have always been the envy of small companies. In the history of many countries, attempts by small firms under one name or another to create a cartel (association, amalgamation, commission on standards, etc., since cartels are officially prohibited in most countries) and to dictate their terms to suppliers and consumers by joint efforts are recorded.

In modern Russia, for example, such steps were taken by tea importers and juice producers. The outcome of these attempts, however, has always been disappointing for their organizers. Since the costs of this organization were not lower than those of small producers, nothing prevented new, independent firms from entering the industry and successfully competing with the cartel, and dissatisfied members of the association itself (these were bound to appear) to leave it calmly and with impunity.

Another thing is industries where large enterprises have lower costs than competitors. This creates a high barrier to anyone wishing to enter the industry. , and under favorable circumstances for leading firms, it allows them to completely monopolize the market. An example of such a company is the Russian enterprise "Center im. Khrunichev" - manufacturer of heavy space rockets "Proton".

In addition to economic barriers, a monopoly is usually protected by legal barriers (legal) and they often play a decisive role.

The most common source of legal barriers are property rights. If, for example, unique sources of raw materials, lands with special properties, etc., are owned by a certain firm, this automatically creates the preconditions for a monopoly. It is only important that the product produced using these natural resources is itself unique and irreplaceable.

Intellectual property rights also enjoy legal protection. Thus, a properly executed and registered invention (a document confirming this is called a patent) gives its owner a monopoly right to manufacture the corresponding product for a certain period of time. The owner of a patent may solely exercise his monopoly right, or may grant it to other persons (grant a license) in full or in part for a fee. Let's say he can sell a license to manufacture and sell patented products in a certain country on the terms of paying a certain percentage of the price of each unit sold.

On the contrary, the absence of a patent deprives the inventor of any privileges. This is how the legal nature of this barrier is manifested: if there is a patent, there is a right; if there is no patent, there are no rights. For our country, this circumstance is of great importance, because almost all inventions of the Soviet era are not protected by international patents and until now are used by foreigners free of charge.

With manifestations unfair competition the state is fighting in the toughest way. The fact is that a large manufacturer in the fight against smaller competitors has a lot of advantages, which actually come down to the use of brute force. Such methods can be used to force the bank to stop lending to competitors, the railroads to stop the transportation of their goods (this is what John D. Rockefeller once did), and so on. It becomes possible to oust a competitor and establish a monopoly even where it would never have developed honestly.

An important type of unfair competition is dumping - the deliberate sale of products below cost in order to oust a competitor. A large firm - a potential monopolist - has large financial reserves. Therefore, it is able to trade for a long time at a loss at low prices, forcing a competitor to do the same. When the latter fails and goes bankrupt, the monopolist will again raise prices and compensate for its losses.

In Russia, the problem of economic monopolization is very acute. The main feature of the monopolization of the Russian market is that it has developed as the "heir" of the state monopoly of the socialist economy.

The socialist economy was a single national economic complex in which each enterprise was not completely autonomous, but was an integral part of the nationwide superstructure. At the same time, the satisfaction of the needs of the whole country in one form or another of the product was often entrusted to only one or two factories. So, at the end of the 80s, more than 1,100 enterprises were complete monopolists in the production of their products. Even more often there was a situation when the number of manufacturers throughout the giant country did not exceed 2-3 plants. In total, out of 327 commodity groups produced by the country's industry, 290 (89%) were subject to strong monopolization.

Thus, if in countries with a market economy, monopolization usually took place through the organizational association of initially independent companies, then socialist monopoly was based on the deliberate creation of only one producer (or a very narrow group of producers).

The beginning of market reforms in our country led to a sharp increase in monopoly tendencies. This was partly due to the collapse of the USSR and the weakening of economic ties between the former Soviet republics. New monopolists were added to the former monopolists, namely, enterprises that were not the only producers within the entire Union, but became such in a reduced territory.

However, the change in business conditions was much more important. Thanks to them, the consequences of monopolization and its impact on the economy have sharply increased. The fact is that the transformation of Russian factories into private enterprises has created a powerful incentive for obtaining monopoly profits. And the freedom to set prices and choose the volumes of production gave firms the means to achieve this goal. All three of the most important consequences of monopolization (underestimation of production, overpricing, obtaining monopoly super-profits), which until then had been restrained by the socialist state, broke out. At the same time, the old vice of Soviet monopoly producers - inefficiency - was preserved wherever the monopoly remained. Strengthening manifestations of monopoly, in turn, had a negative impact on the overall course of reforms in the country.

Using their monopoly power, the monopolists sharply limited supply. The deliberate reduction in output, combined with the increase in prices by Russian monopoly enterprises, was the most important microeconomic reason for the particular depth of the crisis in Russia.

¨ Natural monopolies

In some industries, the rule applies without any restrictions: the larger the scale of production, the lower the costs. This creates the prerequisites for the strengthening of a single manufacturer in such an industry. This state of the market is a monopoly - a situation fraught with a number of major problems for the economy. In this case, however, monopoly arises from natural causes: the technological features of production are such that a single manufacturer serves the market more efficiently than several competing firms are able to do. Economists call such a monopoly natural or technological. Its classic example is various types of infrastructure.

Indeed, it is not economically feasible to build two alternative airports or lay two competing railways next to each other.

It makes no sense to break up natural monopolies. For example, even if the railway network, which is monopoly operated by one company, is divided into several regional sections and transferred to the ownership of independent companies, the natural source of monopoly will still not be eliminated. From city A to city B, it will still be possible to pass only one road. As a result, the single market of transportation services will be divided into a number of local ones. Instead of one monopoly, several will arise (each in its own area). The level of competition will not increase. Moreover, due to the difficulty of harmonizing the work of regional companies, the overall costs of the railway industry may increase.

The macroeconomic aspect of the problem is also important. Infrastructure networks, which are natural monopolies, ensure the interconnection of economic entities and the integrity of the national economic system. They don't speak for nothing. that in modern Russia the economic unity of the country is not least determined by unified railways, common electricity and gas supply.

Thus, the destruction of natural monopolies is unacceptable, but this does not mean that the state should not interfere in their activities, on the contrary, it should regulate the activities of natural monopolies in order to avoid abuses on their part.

¨ Principles of antimonopoly policy

A monopoly is associated with a whole bunch of sharply negative consequences for the country's economy: underproduction, inflated prices, inefficient production. The client of a monopoly company is forced to put up with high prices, to agree with the poor quality of products, their obsolescence (slowdown in technical progress), lack of service and other manifestations of disregard for the interests of the consumer. Even more dangerous is that the monopoly completely blocks the mechanisms of self-regulation of the market.

The omnipotence of the monopolist, due to the insurmountable barriers on the way to the industry, is not threatened by anything even in the long term. The market alone cannot solve this problem. Under these conditions, only a state pursuing a conscious antimonopoly policy can improve the situation. It is no coincidence that in our time there is not a single developed country (and Russia in this sense is no exception) where there would be no special antimonopoly legislation and there would be no special authority to oversee its implementation.

At the same time, the implementation of antimonopoly policy is associated with a number of objective difficulties. As already noted, for industries in which the establishment of a monopolistic structure is possible, a large optimal size of the enterprise is characteristic, i.e. the minimum average long-run costs are achieved at very high volumes of production. Small-scale production in potentially monopolistic industries is extremely inefficient. By assembling cars at tiny enterprises, it is impossible to achieve the same low costs as on the AvtoVAZ assembly line.

And this is far from a special case. You can talk about impossibility, the transformation of a monopolized industry into an industry of perfect competition as a general rule. Transformations of this kind are hindered by positive economies of scale. Even if the state insists on its own and despite the growth of costs will forcibly plant small-scale production, artificially formed dwarf enterprises will turn out to be uncompetitive internationally. Sooner or later they will be crushed by foreign giants.

For these reasons, direct splitting of monopoly firms in developed market economies is quite rare. The usual goal of antitrust policy is not so much to fight monopolists as such, but to limit monopolistic abuses.

The issue is particularly acute with respect to natural monopolies. Their high economic efficiency makes their crushing absolutely unacceptable. As monopolists, these structures are trying to solve their problems primarily by raising tariffs and prices. The consequences of this for the country's economy are the most devastating. Production costs in other industries are rising, non-payments are growing, and interregional ties are paralyzed.

At the same time, the natural nature of the monopoly position, although it creates opportunities for effective work, by no means guarantees that these opportunities will be realized in practice. Indeed, in theory, RAO UES of Russia could have lower costs than several competing electric power firms. But where is the guarantee that it wants to keep them at a minimum level, and, say, will not increase the costs of the top management of the company.

The main way to combat the negative aspects of natural monopolies is through state control over the pricing of natural monopoly goods and the volume of their production (say, by determining the circle of consumers subject to mandatory service).

In addition to price regulation, reforming the structure of natural monopolies can also bring certain benefits - especially in our country. The fact is that in Russia, within the framework of a single corporation, both the production of natural monopoly goods and the production of goods that are more efficient to produce under competitive conditions are often combined. This association is, as a rule, the nature of vertical integration. As a result, a giant monopoly is formed, representing a whole sphere of the national economy.

RAO "Gazprom", RAO "UES of Russia", the Ministry of Railways are the clearest examples of such associations. RAO Gazprom, along with the Unified Gas Supply System of Russia (i.e., a natural monopoly element), includes exploration, production, instrument-making enterprises, design and technological structures, social facilities (i.e., potentially competitive elements). The Ministry of Railways is in charge of both infrastructure (railways, railway stations, information system) and non-monopoly activities (construction and repair organizations, catering enterprises). RAO "UES of Russia" unites both power grids and power plants. Therefore, it is possible to develop competition in those activities of natural monopolies where it can be achieved.

Unlike a natural monopoly, an artificial (or entrepreneurial) monopoly develops in those industries where a single producer does not have increased efficiency compared to several competing firms. The establishment of a monopolistic type of market is therefore not inevitable for such an industry, although in practice it may develop if the future monopolist succeeds in eliminating competitors.

The use of the term "artificial monopoly" in the economic and legal literature has the following peculiarity: this concept is combined both by the dominance of a single monopolist, which is quite rare on the market, and by the more common situation of the predominance of several more or less cooperating firms on it, i.e. speech at once we are talking about pure monopoly and about two varieties of oligopoly - the cartel and the cartel-like structure of the market. Such an extended interpretation of the term "monopoly" is justified by the fact that in all these cases, the firms that dominate the market are to one degree or another able to act as a whole, that is, they show signs of monopolistic domination in the market.

In the case of artificial monopoly, the main direction of antimonopoly policy is to counteract the formation of such monopolies, and sometimes even the destruction of existing ones. To do this, the state uses a wide range of sanctions: these are preventive measures (for example, a ban on the merger of large firms), and various, and often very large, fines for inappropriate behavior in the market (for example, for attempting to collude with competitors), and direct demonopolization, t i.e. the forced fragmentation of the monopolist into several independent firms.

The first legislative act in the history of Russia, regulating the procedure for the competitive behavior of firms in a market economy and containing the "rules" of the game "for competitors, was adopted in March 1991. This is the law of the Russian Federation "On Competition and Restriction of Monopolistic Activities in Commodity Markets". In 1995 d. amendments and additions were made to the text of the Law.

The main body implementing antimonopoly policy in Russia is the Ministry for Antimonopoly Policy and Entrepreneurship Support. Its rights and opportunities are quite wide, and the status corresponds to the position of similar bodies in other countries with a market economy.

In accordance with the new interpretation of the Law, an enterprise that controls 65% or more of the commodity market can be considered an unconditional monopolist. An enterprise that controls 35-65% of the market can also be recognized as a monopolist, but for this, the antimonopoly authorities must prove that there is a "dominant position" of the economic entity in the market by examining the specific market situation.

"Dominant position" gives the firm the ability to exert a decisive influence on competition, hinder market access to other economic entities or otherwise restrict their freedom of economic activity. A list of shares has been established that are treated as abuse of dominant position. These include the withdrawal of goods from circulation in order to create a shortage, the imposition of conditions that are unfavorable to the counterparty or not related to the subject of the contract, the creation of obstacles to competitors' access to the market, and the violation of the established pricing procedure. Collusions on the prices of goods and services, on prices at auctions and tenders, on the division of the market, on the restriction of access to the market are recognized as agreements of economic entities that restrict competition.

The law establishes state control over the creation, merger, accession, transformation, liquidation of business entities, as well as over compliance with antimonopoly laws when acquiring shares, shares, stakes in the authorized capital of an enterprise, forced separation of business entities. The liability of enterprises and officials for violating antimonopoly legislation is provided for.

What policy is the state pursuing in relation to natural monopolies? In this case, a contradiction arises. On the one hand, firms - natural monopolists, like any monopolists, set high monopoly prices, reducing the volume of production, and receive excess profits. On the other hand, as mentioned above, competition in industries with a natural monopoly is not economically efficient. Therefore, the state, preserving natural monopolies, takes measures to limit their negative consequences for society, primarily by controlling prices for their products.

Considerable attention is paid to the fight against competition-restricting practices of local authorities. In the conditions of an unstable economic situation in the country, regional authorities often try to support their enterprises using illegal methods. For example, under one pretext or another, to prohibit the import of competing goods from other regions. This creates a monopoly position for local producers, which naturally provokes protests from the Ministry of Antimonopoly Policy. However, as in other areas of modern Russian economics and politics, the central authorities, despite the legal validity of their demands, are far from always able to overcome the resistance of local authorities.

In general, the system of antimonopoly regulation in Russia is still in its infancy and requires radical improvement.

Today we can state with satisfaction that the traditionally existing gap between Russia and the developed capitalist countries in the field of theory and practice of competition, at least, has ceased to deepen. A real transition to market relations objectively required a more serious attitude to this.

The positive features of competition are obvious. In the presence of competition in the market, manufacturers are constantly striving to reduce their production costs in order to increase profits. As a result, productivity is increased, costs are reduced, and the company is able to reduce prices. Competition also encourages manufacturers to improve the quality of goods and constantly increase the variety of goods and services offered. That. manufacturers are forced to constantly fight competitors for buyers in the sales market by expanding and improving the range of high-quality goods and services offered at lower prices. The consumer benefits from this.

However, as practice has shown, the majority of Russian enterprises are not ready for active competition. In the conditions of price liberalization and a jump in inflation, the industry found itself in a difficult position.

For many decades of the Soviet period, the economy of our country was closed, there was no competition either between domestic producers (almost all sectors of the national economy were highly monopolized, enterprises did not have the right to make independent economic decisions), or with foreign ones. This led to low production efficiency, an excessively high level of costs, and a deep technological lag behind advanced scientific and technical developments in many sectors of the Soviet economy.

Therefore, the wave of imports that flooded the Russian market after the collapse of the USSR, instead of a positive effect, had an extremely negative impact. Most imported goods are produced using modern technologies at lower costs than Russian goods, as a result of which they are cheaper and often of better quality than their domestic counterparts. In addition, in the conditions of a planned economy, our factories did not have traditions of competitive struggle, such important components of it as non-price competition and advertising were not developed. Thus, Russian manufacturers were simply not ready to compete with foreign ones, and many of them went bankrupt in the first years of the reform, which plunged the country into a deep crisis.

It is possible that such consequences would not have occurred if the state had acted more carefully in relation to the regulation of import volumes, gradually increasing the level of competition in the country's domestic market, enabling domestic producers to adapt to the new conditions.

The problem of the competitiveness of Russian goods remains acute to this day, therefore, a well-thought-out, competent state policy is needed to control the import of goods and promote domestic producers.

And yet, a way out of a difficult financial situation can only be on the way to creating a competitive production focused on the needs of consumers. And in this sense, competition is not a destabilizing factor, but a condition for the survival of domestic production.

It is impossible to deny the positive aspects that competition has brought to our economy. The theory of perfect competition is not as far from Russian reality as one might think. This is facilitated by the development of small business in our country, which, despite all the difficulties, is rapidly gaining momentum.

The fact is that the majority of Russian businessmen started their business literally from scratch: no one had large capitals in the USSR. Therefore, small business has embraced even those areas that in other countries are controlled by big capital. Nowhere else in the world do small firms play such a prominent role in export-import operations. In our country, many categories of consumer goods are imported mainly by millions of shuttles, i.e. not even just small, but the smallest enterprises. In the same way, only in Russia, the smallest firms-teams are actively engaged in construction for private individuals and the repair of apartments. Small-scale wholesale trade is also a specifically Russian phenomenon.

Shuttles, photo studios, hairdressing salons; vendors offering the same brands of cigarettes or chewing gum at subway stations and auto repair shops; typists and translators; apartment renovation specialists and peasants selling vegetable markets - all of them are united by the approximate sameness of the product offered, the insignificant scale of the business compared to the size of the market, the large number of sellers, that is, many of the conditions for perfect competition. Mandatory for them and the need to accept the prevailing market price. The criterion of perfect competition in the sphere of small business in Russia is fulfilled quite often.

Thus, conditions close to perfect competition exist in many sectors of the economy where new private business predominates.

A completely different picture is observed in industries dominated by privatized enterprises. These sectors of the economy are usually highly monopolized.

The high level of monopolization and its sharply negative impact on the economy makes it necessary to conduct an antimonopoly policy in our country. Moreover, Russia needs to be demonopolized; a radical reduction in the number of sectors of the economy where a monopoly has been established.

The main problem and at the same time the difficulty is the specifics of the monopolism inherited from the socialist era: Russian monopolists for the most part cannot be demonopolized by disaggregation.

In the West, the demonopolization of giant enterprises is possible by dividing them into parts. These monopolists were formed by merging and acquiring independent firms. The latter, at least theoretically (in practice, this is rarely done, and there is no need for this, since one hundred percent monopolists are almost never found), can be restored as independent companies. Russian monopolists, on the contrary, were immediately built as a single plant or technological complex, which in principle cannot be divided into separate parts without complete destruction.

Another way of demonopolization - foreign competition - was probably the most effective and effective blow to domestic monopoly. When next to a monopolist's product on the market there is an imported analogue superior in quality and comparable in price, all monopolistic abuses become impossible. The monopolist has to think about how not to be ousted from the market at all.

But the problem is that due to ill-conceived foreign exchange and customs policies, import competition in many cases turned out to be excessively strong. Instead of limiting abuses, it has effectively destroyed entire industries.

Obviously, the use of such a potent method must be very careful. Imported goods, no doubt, should be present on the Russian market, being a real threat to our monopolists, but should not become a reason for the mass liquidation of domestic enterprises.

Another way - the creation of new enterprises that compete with monopolists - is preferable in all respects. It eliminates the monopoly without destroying the monopolist himself as an enterprise. In addition, new enterprises always mean production growth and new jobs.

The problem is that in today's conditions it is difficult to implement. Due to the economic crisis, there are few domestic and foreign companies in Russia willing to invest in the creation of new enterprises. Nevertheless, certain shifts in this regard, even in crisis conditions, can be provided by state support for the most promising investment projects.

Natural monopolies present a particular problem. Every now and then in the Russian press there are reports of rolling blackouts, non-payments, conflicts between monopolists and consumers. Perhaps there is no other country where natural monopolies would play such an important role as in Russia, because there is no country comparable to Russia in terms of area and population living in difficult climatic conditions. The high efficiency of natural monopolies makes it impossible to break them up. The main way to combat the negative aspects of natural monopolies is through state control over the pricing of natural monopoly goods and the volume of their production.

Since the beginning of the 1990s, these problems have become acute for Russia: without taking firm and consistent measures against monopolism, one cannot hope for the success of economic reform and the transition to a market economy. The success of economic reforms to a large extent depends on a balanced, well-considered system of state regulation of monopoly processes and competitive relations.

At this stage, the problem of monopolization and unfair competition ceases to be purely economic - it becomes more and more political and social. Undoubtedly, in some cases the existence of a monopoly is justified and necessary, but these processes must be strictly controlled by the state to prevent abuse of its monopoly position.

A decisive role in creating a favorable competitive environment in the market is played by antimonopoly legislation and the activities of antimonopoly authorities, the correct behavior of which contributes to the stabilization of the entire economy as a whole.

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Of course, you can get rid of fixed costs if you liquidate the company. But this is already a problem not of the short term, but of the long term, because in the short term, production capacities do not change, including they are not liquidated.

The most important feature of market relations is competition. Depending on the methods of its implementation, perfect and imperfect competition are distinguished. The conditions that determine the nature of competition include the number of sellers and buyers, the number and size of firms, the type of product, the conditions for entering and exiting the industry, the availability of information, etc. However, the most important factor characterizing perfect and imperfect competition is the degree of influence of the seller or buyer at the market price.

Market Structure- this is a type of market, which is characterized by certain characteristic manifestations of these conditions that predetermine the behavior of market entities. The specific features of a particular market structure are also the degree of monopoly power of sellers and buyers, the level of their interdependence, the nature of the forms and methods of competition.

The market structure is characterized perfect competition, if none of the market participants (sellers or buyers) is able to have a significant impact on the price.

- a large number of sellers;
- a large number of buyers;
- homogeneity of products produced in the industry;
- free entry to the market and exit from the market;
- free flow of capital between industries;
- equal access of economic agents to all types of information;
- rational behavior of all market participants pursuing their own interests, their collusion in any form is impossible.

In a perfectly competitive market, buyers of homogeneous products do not care which firm to choose. Markets of vegetables and fruits (potatoes, gourds, apples, etc.) are close to the state of the market of perfect competition. Since there are a lot of buyers and sellers of homogeneous products, this means that they are all price takers, i.e. none of them is able to significantly affect the price.

In addition, having full information about the characteristics of the product and its prices, as well as technologies and prices for production factors, in the conditions of capital mobility, market agents instantly respond to changes in market conditions, therefore, in perfect competition markets, there is always a single price for goods and services.

A firm that sells its products in a perfectly competitive market is called a competitive firm. These firms are not able to influence the price, so they act as accepting the price.

The demand for the product of a firm that is a perfect competitor is perfectly elastic, so the demand curve is horizontal line(rice. 7.1).

Rice. 7.1.

This means that a firm operating in a perfectly competitive market can sell any quantity of a good at a price R E or below it. However, at any price above equilibrium, the quantity demanded of the firm's output will be zero.

However, in a perfectly competitive market, there are many sellers and buyers. The demand curve thus has a negative inclination when all possible combinations of the choice of the buyer are shown (fig. 7.2).

A perfectly competitive firm, being a price taker, treats the price as a given, independent of the volume of production. Therefore, when choosing the volume of output that provides maximum profit, the firm will consider its output as a constant value.

Rice. 7.2.

Free market entry and exit ensure that there is no agreement between producers to increase prices by reducing output, since any price increase will attract new sellers to the market, which will increase the supply of the good. The supply of a competitive market and the market demand for products are equalized at the equilibrium price. The interaction between supply and demand under perfect competition in the short run is shown in Fig. 7.3.

Rice. 7.3.

For the entire market (as opposed to a single firm), it has a normal form, corresponding to the law of demand. The equilibrium point (?) corresponds to the equilibrium price (P?) and the equilibrium sales volume (Q?). Equilibrium in conditions of perfect competition is stable, since the firms that form the market supply are not interested in its violation.

In the long run, the equilibrium is even more stable. This is due to the fact that entry into and exit from a perfectly competitive market is completely free, and the level of profitability becomes a regulator of the resources used in this industry. The free flow of capital between industries means that when changing the type of activity, the manufacturer will be able to realize the desire to move his business to another field of activity without loss. Thus, the prospect of obtaining economic profit attracts new producers to the industry, and the threat of economic losses can scare away the amount of resources used in it, moving some of them to other industries. The mechanism of formation of a long-term equilibrium of a firm in a perfectly competitive market is shown in Fig. 7.4.

Rice. 7.4.

competition

Suppose that in a perfectly competitive market, demand suddenly increases and the demand curve shifts from position D into position Dv Then the market equilibrium will be reached at the point E g at a price R g and the equilibrium sales volume Q a . But in this case, the firms will significantly increase the supply, as they will expect to receive higher profits. In addition, new manufacturers will enter the market. The consequence of this will be an increase in supply and a shift in the supply curve first to position S 1; and then S 2 until economic profit is zero. Then the influx of new producers into the industry will dry up, and the market equilibrium will be restored at the price P E, but with an increase in sales to the value of Q 3 .

A perfectly competitive market has both advantages and disadvantages. The advantages include the desire of manufacturers to reduce production costs, which is associated with the need to constantly introduce new technologies for organizing production and management. Moreover, both the firm and the industry as a whole operate without shortages and overstocking, since the mechanisms of free competition maintain the market structure in an equilibrium state. Consequently, the market of perfect competition can function without government intervention, as it is capable of self-regulation.

However, a perfectly competitive market is not without its drawbacks. Firms operating on it are often small businesses that are not able to ensure the concentration of resources to achieve economies of scale and introduce the most efficient equipment and technology. This holds back scientific and technological progress and the rapid spread of innovation, which is common in a market where large manufacturers operate with the means to finance expensive research and development activities, the results of which, in terms of commercialization, can be predicted.

Finally, one more important circumstance should be noted: a perfectly competitive market is an ideal model of a market structure, which in modern conditions does not function in its pure form in any of the industries. In the real market, in the strict sense, there are no absolutely homogeneous products (even the same shoes, but in different sizes, cannot be considered as completely identical products). On it, as a rule, firms of different sizes operate, which are multi-product, the conditions of perfect competition are violated to one degree or another, and market structures of imperfect competition are formed.

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