The Theory of Monopoly Essay Example | Topics and Well Written Essays - 1250 words

The Theory of Monopoly - Essay Example The fourth type of monopoly is, probably, the most important. It is the monopoly on ideas, that is, on the intellectual products; when this or that discovery is made, it is necessary to compensate the expenses and to have the patent, because otherwise the owner of the idea would not be able to compensate his expenses and to continue his experiments, thus temporary (at times, very durable) monopoly is created for the idea, which is the basis of the product. Antimonopoly laws in the USA have appeared at the end of the 19th century and have brought huge benefits, as they fostered competition, and competition in its turn favors not only the low prices of products, but also stimulates the manufacturer to decrease his expenses; to decrease the expenses he is obliged to carry out technological and technical innovations, - that is why the division of the usual monopolies led to the technical progress. After the World War II several large monopolies in Germany have been divided - the best example is in the chemical giant 'IG-Farben', which has been divided into several parts, now represented by the chemical companies 'BASF', 'Bayer' and 'Hoechst'. However, in general, such division in Europe was not usual. On the contrary, the process of statism, as it has happened with Renault Company in France, with their simultaneous enlargement, was widely spread in the European countries. European markets are formed according to the oligopoly principle, - automobile market is the bright example of such situation - several large companies constantly compete with each other; the same situation is in the sphere of pharmaceuticals and chemical products. There are several features, which are peculiar to the development of monopolies and... Antimonopoly laws in the USA have appeared at the end of the 19th century and have brought huge benefits, as they fostered competition, and competition in its turn favors not only the low prices of products but also stimulates the manufacturer to decrease his expenses; to decrease the expenses he is obliged to carry out technological and technical innovations, - that is why the division of the usual monopolies led to the technical progress. After the World War II, several large monopolies in Germany have been divided – the best example is the chemical giant ‘IG-Farben’, which has been divided into several parts, now represented by the chemical companies ‘BASF’, ‘Bayer’ and ‘Hoechst’. However, in general, such division in Europe was not usual. On the contrary, the process of statism, as it has happened with Renault Company in France, with their simultaneous enlargement, was widely spread in the European countries. European mar kets are formed according to the oligopoly principle, - automobile market is the bright example of such situation – several large companies constantly compete with each other; the same situation is in the sphere of pharmaceuticals and chemical products. There are several features, which are peculiar to the development of monopolies and competition at present time. The first tendency is the growing monopolization of the market; the scientific and technical revolution has caused the transition to the higher level of business enlargement (the uniting of organizations).