Perfect Competition

requirements of perfect competition

1. Competitor in the economy

Perfect competition

Imperfect Competition

Model monopolist

Monopolistic competition

Antitrust policy

Duopoly

The essence of competition

Competition functions

Ways to compete

The Importance of Competition

individual competition

National competition

Competition as a mechanism for self-regulation of a market economy

Competition - this is rivalry of several subjects in achieving a similar goal.

In biology, they talk about competition between individuals of the same species (intraspecific competition) or between individuals of different species (interspecific competition), in view of the limited resources of the external environment - food, light, water, shelters, etc.

In economics, they talk about the business competition of business entities, each of which, by its actions, limits the ability of a competitor to unilaterally influence the conditions for the circulation of goods on the market, that is, the degree of dependence of market conditions on the behavior of individual participants market.

As the degree of competition on market;

As a self-regulatory element of the market mechanism;

Competition (Late Latin concurrentia, from Latin concurro - running away, colliding), characteristic of commodity production based on private ownership of the means of production, antagonistic struggle between private producers for more profitable terms production and marketing of goods; under capitalism, the struggle between capitalists for the highest profit. Competition is generated by private capitalist ownership of the means of production, when there is no other economic connection between producers than the market. At the same time, competition is a mechanism for the spontaneous regulation of social production. As a result of competition, some producers are ruined and others (economically stronger) are enriched; small commodity producers emerge, which inevitably leads to the development of capitalist production relations. Competition develops most fully under conditions capitalism. It manifests itself in the operation of the economic law of competition and the anarchy of production. Forms and methods of competition have changed at various stages of development capitalism. Under pre-monopoly capitalism, free competition prevailed, which was characterized by relatively peaceful methods, was reduced to the economic suppression of the rival (to ruin him), mainly by the method of open price competition (bringing down prices). In this in the most "pure" form, 2 main forms of competition are manifested - intra-industry competition, which is conducted for influence and a place in the market (as a result of it, a single social or market price), and intersectoral competition for the most profitable areas of capital investment. As a result of intersectoral competition, there is an overflow capital from industries with a low rate arrived in industries with a high standard arrived, which leads to the formation of an average rate of profit, the same in all industries production. Thus, competition is an antagonistic form of development of the productive forces in the capitalist economy. Each commodity producer, capitalist or individual monopoly, in an effort to reduce production costs in order to survive in the struggle of all against all and destroy the rival, is forced, regardless of their will, to use modern machine technology, progressive technology, to develop new industries and types of production.

Competition acts as a powerful factor in the concentration of production, which at a certain stage leads to the emergence of monopolists and the development of capitalism of free competition into imperialism—the highest and last stage of capitalism. Free competition is replaced by a monopolist. But the dominion of monopolists does not eliminate competition, since the appropriation of the results of labor remains private. The anarchy of production persists, the antagonism of the interests of various monopoly groups and various strata of the bourgeoisie. And the more intensively the monopolistic economy develops, the more intense competition becomes, and its character depends on the degree of monopolization of the capitalist economy. V. I. Lenin wrote: “... Monopolists, growing out of free competition, do not eliminate it, but exist above it and next to it, thereby giving rise to a number of especially sharp and sharp contradictions, frictions, conflicts” (Complete Works, 5 edition, volume 27, page 386). , which grew out of free competition, is its direct opposite. Monopoly exists in an environment of commodity production and is in constant conflict with it. Since a monopolist, at least temporarily, can establish monopoly prices, insofar as, to a certain extent, the incentive to technical progress, but, nevertheless, "... Monopoly under capitalism can never completely and for a very long time eliminate competition from the world market ..." (ibid., page 397). The competition is already on a new basis. The interaction of the forces of monopoly and competition is the most important feature of the economic mechanism in the era dominion monopolists. Of decisive importance is competition among the largest corporations: intra-industry, inter-industry, within national economies and on the scale of the entire capitalist system. Competition is also carried out between monopolists and non-monopolized enterprises (outsiders), and the methods of direct pressure are widely used by the monopolist: depriving outsiders of buyers (through agreements with trading companies); difficulty in transporting their goods (through agreements with transport companies); forfeiting a loan, etc. To a certain extent, competition also takes place within monopolistic associations of enterprises. Particularly intense competition is unfolding over sources of raw materials, over markets marketing. The most important feature monopolistic competition - changing the role of price competition. It is carried out through price maneuvering (a system of secret price reductions and concessions compared to the declared prices for large buyers; general and partial sales of goods at reduced prices; setting the same price for goods of different quality). Particularly characteristic of contemporary monopolistic competition is the widespread use of various forms of non-price competition (technical superiority, quality, and reliability). trade items, methods marketing, the nature of the services and guarantees provided, the terms of payment). In the hands of the biggest corporations innovations become an instrument of competition in the national and world markets. It is the largest organizations that concentrate in their hands the main production capacities in dynamic industries, have research laboratories and scientific personnel, concentrate the main patents, have the necessary capital and enjoy government subsidies and orders. provides the largest monopolists with free subsidies, preferential tariffs, the right to accelerated depreciation, that is, to set excessively high depreciation rates for fixed capital. That. the mechanism of spontaneous market regulation is under the influence of private monopoly and state regulation.

Advertising has become one of the main means of competition. It contributes to the redistribution of markets between competitors, increasing their capacity and creating new markets. Large firms widely use non-market forms of struggle in competition: financial fraud, speculation securities, litigation, economic boycotts, forced mergers up to direct sabotage, etc. All these methods and forms of competition lead to an increase costs corporations, which are passed on to society through the mechanism of monopoly high prices. Monopolistic competition, on the one hand, accelerates the pace of scientific, technical, organizational, and structural changes, and, on the other hand, exacerbates the contradictions of capitalism. “It is precisely this combination of contradictory ‘principles’: competition and monopoly that is essential for imperialism, it is precisely this that prepares the collapse, i.e., the socialist revolution,” pointed out V. I. Lenin (ibid., vol. 32, page 146).

In a socialist society based on public ownership of the means of production and systematic companies production, no competition. Relations of comradely cooperation and fraternal mutual assistance give rise to socialist competition, which is the direct opposite of capitalist competition.

A competitor is a person, a group of persons, company, competing in achieving identical goals, in an effort to possess the same resources, benefits, to occupy a position in the market.

Competitor in the economy

In economics, they talk about the business competition of business entities, each of which, by its actions, limits the ability of a competitor to unilaterally influence the conditions for the circulation of goods on the market, that is, the degree of dependence of market conditions on the behavior of individual market participants. In accordance with law RF dated July 26, 2006 No. 135-FZ “On Protection of Competition”, competition is the rivalry of economic entities, in which the independent actions of each of them exclude or limit the ability of each of them to unilaterally influence general terms and Conditions circulation of goods in the relevant commodity market.

From an economic point of view, competition is considered in 3 main aspects:

As the degree of competitiveness in the market;

As a self-regulatory element of the market mechanism;

As a criterion by which the type of branch market is determined.

Perfect Competition

Perfect competition is a state of the market in which there are a large number of buyers and sellers (producers), each of which occupies a relatively small share on the market and cannot dictate the conditions for the sale and purchase of goods. It is assumed that the necessary and accessible information about prices, their dynamics, sellers and buyers not only in this place, but also in other regions and cities. Perfect competition means there is no authorities producer over the market and setting prices not by the manufacturer, but through the function of supply and demand.

Features of perfect competition are not inherent in any of the industries in full. All of them can only approach the model.

The features of an ideal market (market of perfect competition) are:

Absence of entry and exit barriers in a particular industry;

No restrictions on the number of market participants;

Uniformity of similar products presented on the market;

Free prices;

Lack of pressure, coercion from some participants in relation to others

Creating an ideal model of perfect competition is an extremely complex process. An example of an industry close to a perfectly competitive market is agriculture.

Imperfect Competition

Perfect competition is not always possible in the market: monopolistic competition, oligopoly and monopoly are forms of imperfect competition. With a monopolist, it is possible for the monopoly to crowd out other firms from the market.

Signs of imperfect competition are:

dumping prices

Creation of entry barriers on any goods

Price discrimination (selling the same product at different prices)

The use or disclosure of confidential scientific, technical, industrial and commercial information

spreading false information in advertising or other information regarding the method and place of manufacture or quantity of goods

Silence of important information for the acquirer

Losses from imperfect competition:

Unjustified price increase

Increase expenses production and circulation

Slowdown in scientific and technological progress

Decreased competitiveness in global markets

Decline in the efficiency of the economy

Perfect Competition

Competition - in the everyday sense - the rivalry of economic entities for the best conditions for the production, purchase and sale of goods.

Competition - in classical economic theory - an element of the market mechanism, which allows you to balance and sentence.

Encyclopedia of the investor. 2013 .

Synonyms:

See what "Competition" is in other dictionaries:

COMPETITION- the law of commodity production, reflecting the mechanism of rivalry between commodity producers, due to the inconsistency of their interests in the field of production, sales and trade activities. In the practice of competition are widely used ... ... Financial vocabulary

COMPETITION- (competition) A situation in which anyone who wants to buy or sell something can choose between different suppliers or buyers. In perfect competition, there are so many sellers and buyers that all participants ... ... Economic dictionary

COMPETITION- (fr. concurrence, from lat. concurrer to run together). Competition, rivalry, competition of several merchants regarding the sale of the same goods. Dictionary of foreign words included in the Russian language. Chudinov A.N., 1910. ... ... Dictionary of foreign words of the Russian language

Competition- rivalry between participants in economic relations for limited resources: raw materials, labor, capital, markets. Competition in a broad sense is present in any economy, both planned and market. In the first case, enterprises and ... ... Banking Encyclopedia

Competition- (competition) Rivalry between suppliers of goods and services in the struggle for market share. Most economic theories agree that competition is beneficial in terms of achieving Pareto optimality. The state usually... Glossary of business terms

COMPETITION- this is central planning, carried out by many independent individuals. Friedrich Hayek Competition provides the best quality products and develops the worst qualities of people. David Sarnoff Competition life trade and death ... ... Consolidated encyclopedia of aphorisms

competition- See rivalry... Dictionary of Russian synonyms and similar expressions. under. ed. N. Abramova, M.: Russian dictionaries, 1999. competition struggle, rivalry, competition, competition; confrontation, rivalry. Ant. partnership... Synonym dictionary

National Open Institute of Russia

St. Petersburg

Department of Economics

Discipline "Economic theory"

COURSE WORK

Students of the M83s2v group

Nechaeva Elena Alekseevna

"Competition, its role in a market economy"

Checked ____________________

The date________________________

Excellent rating

St. Petersburg

Introduction______________________________________________________________3

Chapter 1. Competition. Types of competition____________________________6

1.1. The concept and conditions for the emergence of competition ____________________6

1.2. Functions of competition _________________________________________ 7

1.3. Types of competition _______________________________________ ____10

Chapter 2. Models of markets for perfect and imperfect competition ____12

2.1. Perfect (pure) competition _____________________________12

2.2. Monopolistic competition______________________________14

2.3. Oligopoly _________________________________________________15

2.4. Pure monopoly ___________________________________________16

Chapter 3. Competition in the Russian economy. Antimonopoly legislation and state regulation of the economy __________20

Conclusion ____________________________________________________________26

List of references _________________________________28

Introduction

COMPETITION is a competition between producers (sellers) of goods, and in the general case - between any economic, market entities; struggle for markets for goods in order to obtain higher incomes, profits, and other benefits (from lat. concurrentia - to collide).

The purpose of this work is to analyze the evolution of the concept of "competition" with the development of economic theories, to show what role the state plays in the development and maintenance of competitive relations in a market environment.

In the system of market relations, buyers freely exchange goods in many competitive markets. Competition is the mechanism that decides everything economic problems society.

The market nature of economic relations means freedom of choice for the buyer and seller. The mechanism of the market operates through the correlation of supply and demand, which implies the necessary mobility of prices, competition of goods and, therefore, commodity producers. Competition is an integral part of the market environment, a necessary condition for the development of entrepreneurial activity.

Competition arose simultaneously with commodity production, but only under capitalism did it become the main lever of market regulation of social production.

Competition has both positive and negative sides.

The positive impact of competition on the economy is as follows:

1. It contributes to the development of scientific and technological progress, constantly forcing the commodity producer to apply the best technologies, rationally use resources. Thanks to competition, economically inefficient production, outdated equipment, and low-quality goods are washed out;

2. it is sensitive to changes in demand, leads to cheaper production costs, slows down the rise in prices, and in some cases leads to their reduction;

3. to a certain extent equalizes the rate of return on capital and the level wages in all sectors of the national economy.

The negative aspects include:

1. gives business a certain instability, creates conditions for unemployment, inflation and bankruptcy;

2. leads to income differentiation and creates conditions for their unfair distribution;

3. Its consequence may be overproduction of goods and underutilization of capacities during periods of production downturns.

During the years of the planned economy in our country, competition did not play the role that is assigned to it under market methods of management. From the point of view of organizing a planned economy, the concentration of production in monopolies was considered the most effective way of managing, and competition was considered a source of chaos and crises of overproduction. Thanks to this, the Russian economy has turned not only into a system of highly monopolized industries, but literally into the sum of gigantic industrial subsistence farms, independently providing themselves with everything they need: from auxiliary production to the social sphere. Ultimately, all this has led to low production efficiency, excessively high levels of costs, and, in some industries, to a deep technological lag behind advanced scientific and technical developments.

With the transition of Russia to market methods of management, the role of competition in economic life society has grown significantly.

The fiercer the competition for domestic market, the better prepared national firms are to fight for markets abroad, and the more advantageous are consumers in the domestic market both in terms of prices and product quality. After all, competitive products should have such consumer properties that would favorably distinguish them from similar products of other competitors.

maintenance competitive environment in the Russian Federation, as in all developed countries now, has become an important task of state regulation of the economy. This means that the study of competition, its role in the development of market relations is currently the most important task of economic research in our country.

Chapter 1. Competition. Types of competition.

1.1. The concept and conditions for the emergence of competition.

Competition is rivalry, economic struggle, rivalry between sellers - manufacturers for the right to obtain maximum profit and between buyers when buying goods for a greater benefit.

Competition contributes to the efficient use of limited resources. Resources are distributed by industries and types of production in such a way that the products obtained from these resources bring them profit. It is the regulating force in the market conditions. Adam Smith called her "the invisible hand".

Competition performs the most important function in a market economy - it forces producers to take into account the interests of the consumer, and hence the interests of society as a whole. In the course of competition, the market selects from a variety of goods only those that are needed by consumers. They are the ones that sell. Others remain unclaimed, and their production is reduced. Competition is a specific mechanism by which the market economy solves fundamental questions: what, how and for whom to produce?

Competition plays an important role in market relations. It stimulates the development of the economy and the workers themselves, the activity of independent units. Through it, commodity producers, as it were, control each other. Their struggle for the consumer leads to lower prices, lower production costs, improved product quality, and the development of scientific and technological progress.

Competition is the rivalry of subjects economic activity to achieve the highest results in their interests. How economic law competition expresses a causal relationship between the interests of business entities and the results in the development of the economy.

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. Thus, 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.

The main conditions for the emergence of competition:

1. complete economic (economic) isolation of each commodity producer;

2. complete dependence of the commodity producer on market conditions;

3. opposition to all other commodity producers in the struggle for consumer demand.

Competition is the most important element of the market, which plays a role in improving the quality of products, works and services, reducing production costs, in mastering technical innovations and discoveries.

1.2. Competition features.

Competition directs limited resources to those industries and activities for which there is a demand for products and services. This is called the allocation function or allocation function.

The innovative function of competition is to stimulate the introduction of scientific and technological achievements, new technologies, the release of new types of products and services, improving the quality of products and services, etc.

The function of competition, which consists in creating conditions for the receipt of income and profit by the most successful enterprises and leading to the bankruptcy of an enterprise whose products and services are not in demand by the consumer, is called distribution.

Competition is a tool (means) that prevents the emergence and existence of sustainable monopoly power in the market. For example, a monopolist may charge a price. At the same time, competition provides the buyer with the opportunity to choose among several sellers. The more perfect the competition, the fairer the price. That is, competition has a controlling function.

Competition contributes to the establishment of an equilibrium price, the equation of supply and demand. In a purely competitive market, individual firms exercise little control over the price of products, have such a small share of the total volume of production that an increase or decrease in its output will not have a tangible effect on the price of the goods. The manufacturer, as well as the buyer, must always be guided by the market price. Thus, competition contributes to reaching a compromise between sellers and buyers. Here it can be noted that competition creates the identity of private and public interests. Firms and resource providers seeking to increase their own benefit and operating within the framework of intense competition, at the same time, as if directed by an “invisible hand”, contribute to ensuring state or public interests

Anna Sudak

bsadsensedynamick

# Business nuances

Competition and economics

Article navigation

• What role does competition play in the economy?
• Types of behavior of market entities
• Economic systems and their features
• Examples of competition in the traditional economy
• Market economic system
• Command economic system
• Mixed economic system
• Functions of competition in a market economy
• Freedom of competition: perfect and imperfect
• Forms of imperfect competition
• Types of competition depending on the scale of its development
• Intra-industry and inter-industry competition
• The nature of the development of competition
• Antimonopoly legislation of Russia - regulation of the economy on state level
• Methods antitrust policy RF
• Antimonopoly control tool

Competition is a struggle between producers of goods or services, the purpose of which is to maximize profits, expand sales markets and reduce production costs. The presence of competition stimulates to do better, faster, better. A manufacturer that satisfies the needs and desires of the customer makes a profit.

On the one hand, it is an incentive for the development of enterprises, and on the other hand, it is the protection of the interests of consumers. Indeed, in fierce competition, few people will allow themselves to make goods for the sake of money, spitting on the interests of the buyer.

What role does competition play in the economy?

This is the question we will try to find an answer to. So, what is competition for?

1. To install a fair market value goods;
2. To regulate labor in the market;
3. To equalize individual profits, depending on the production capabilities of the enterprise.

Simply put, each company gets what it deserves. With the proper management of available resources, the enterprise makes a profit. If it is wrong, it dooms the enterprise to “death”.

Types of behavior of market entities

Depending on their capabilities, competing objects choose one or another model of action. Let's take a closer look at them.

• Creative (creation). Such a model of the object's behavior is aimed at legally pure superiority over rivals. That is, the company has own resources to meet consumer demands.
• Adaptability. Copying the production capabilities of competitors.
• Security. This model of behavior is aimed at maintaining a good name and protecting "one's piece of the pie."

If we consider enterprises from the point of view of active participation in competitive confrontation, we can distinguish four types of them:

• undisputed leaders,
• striving for leadership
• slaves,
• newcomers.

Modern competition is tacitly called fair and efficient. That is, no monopoly. Where each manufacturer feels free, and the buyer is confident. For our country, this is a bit of a utopia. Even with current legislation. But more on that later, but for now...

Economic systems and their features

There is a goal of the consumer - to get a quality product. There is a goal of the manufacturer - profit. And there is a goal of the whole society - growth, stability, jobs. These are the fundamental needs of the economy.

But the economy is not an easy thing. It consists of a mass of systems that, one way or another, try to solve the main questions: what for whom and how to produce so that everyone wins?

Let's consider four economic models that radically differ from each other in ideas and tools for achieving these ideas.

Examples of competition in the traditional economy

First, let's look at what a traditional economy is. As it turns out, the definition of the term is simple. The traditional economy is the traditions that are passed down to us from fathers, forefathers, and many other practical ones. Simply put, the economy is a legacy left to us by our ancestors.

The traditional economy dictates what, how to produce, where and for whom. What economic and technical benefits to use. And in general, the traditional economy consists very often of social castes - elected leaders. And by whom they were elected, for what - a rhetorical question.

An economy of this type exists today only in the territory of underdeveloped countries, where people are reluctant to let innovations into their lives that completely destroy their centuries-old traditions.

How can you characterize the traditional economy?

1. Lack of innovation in production;
2. Manual labor in all industrial sectors;
3. Blind obedience to customs, traditions;
4. Minimum entrepreneurial potential.

It is believed that the traditional economy is a relic of the past and an echo of the primitive system, but ... Even today, such an economic form exists in modern society. Gathering, hunting, and farming still exist in South America, Asia, and Africa, without the use of modern tillage techniques. All this brings money, but irregularly. Therefore, it is very difficult to call such an economic form stable. An example of competition in such economic model you can name seasonal earnings abroad: picking berries, caring for flowers, etc.

Market economic system

The market or capitalist economy is based on private property. For the development of entrepreneurial activity, personal capital is used. Therefore, the levers for managing the economic situation are concentrated in the hands of entrepreneurs.

But the need for a particular product, its cost, quality, is regulated by the consumer himself according to the “demand makes supply” system. The criteria for a market economy are:

• fair competition of producers in a market economy;
• free entrepreneurial choice;
• private property;
• minimum government intervention.

Since the manufacturer cannot regulate the cost of goods, the task of the enterprise is to make more goods with minimal production costs. This allows you to significantly reduce the price and sell more to those who need it.

Command economic system

The complete opposite of a market economy. In a command economy, all resources are concentrated in the hands of the state. Therefore, it decides what, to whom, how and in what volumes to sell. The state develops a unique production plan for each enterprise, in which it dictates what and for whom to produce. And to disobey an order from above means to break the law.

Mixed economic system

Now in the world you can hardly find a state that follows one particular economic model. Most often, three are used at once. Somewhere more market, somewhere command. And in some cases traditional. The result of these manipulations is one - to show the true meaning of competition.

Competition is not war, but rivalry. Healthy competition for the love and loyalty of the consumer.

Functions of competition in a market economy

Let us briefly consider what functions of competition in the economy exist.

• placement function. Distributes resources and finances among enterprises whose products are in demand.
• Innovative. Contributes to improving the quality of goods through the introduction of modern technologies.
• Distribution. Gives trophies to the winners, and wipes out weak enterprises from the face of the earth.
• Control. Prevents the emergence of a monopoly in the market. Gives freedom to entrepreneurs, does not infringe on the rights of consumers. And now about freedoms in more detail.

Freedom of competition: perfect and imperfect

Perfect Competition It is a competition in which everything is decided by the consumer. None of the market players can influence the course of events in any way. In general, a clean and transparent system in which winners and losers are clearly visible.

Imperfect competition (monopolistic)- competition in which someone alone dictates the rules of the game. It appears before us in various forms.

Forms of imperfect competition

Monopoly - the power of one seller (there is its opposite, monopsony - the power of one buyer).

Oligopoly - the market belongs to several firms that rule the ball by agreement and redistribution of finances among themselves.

What types of monopolies exist

Natural. It happens when firms cannot compete properly, all laurels are reaped by those who can give the best in their segment.

Artificial. When all economic interests are in the same hands.

Innovative. This monopoly is short-term. It depends on the relevance of the product, which in a short period of time caused a sensation among consumers.

Pros and cons of monopolies

Here, as in any other direction, there are two sides: positive and negative. Let's start with the good one. So the positives are:

• High profit by reducing the scale of production, production costs;
• The rapid development of the technological base of production processes;
• Effective stimulation of the public interest in an industry where competition is useless.

Now let's go through the negative:

• Artificially low supply, high prices;
• There is no healthy competition, which leads to a drop in product quality;
• A segment of the market “fails”, which adversely affects the entire economic situation countries.

Types of competition depending on the scale of its development

If we talk about the types of competition, it can be conditionally divided into:

• Individual. In this case, one market participant receives better living conditions through the sale and purchase of goods and services;
• Local. In this case, several (and more) entrepreneurs huddle in one territory at once;
• Industry. In this case, firms in the same industry compete for excess profits;
• Intersectoral. In this case, the struggle for each client unfolds.

Intra-industry and inter-industry competition

The best example of economic relations is countries with a highly developed industry, where the concept of a market economy has existed for a long time and has not been transformed into any forms. Let's talk about intra-industry and inter-industry competition.

Intra-industry competition is the competition of companies in one industry (one segment) for excess profits. Its main functions:

• Settling the price of goods on the market;
• Stimulation of the development of scientific and technological progress;
• Economic kick to the manufacturer to improve efficiency;
• Cutting off weak, non-competitive producers;
• Minimization of leadership power in the market.

Intersectoral competition is the struggle for capital between participants in different industries with the same production conditions. Its main functions:

• Modernization of industries due to new progressive production capacities;
• Increase in production volumes;
• Optimization of the sectoral economy.

The nature of the development of competition

Competition - the young lady is quite predictable, albeit risky. Its nature is sometimes described as regulated or unregulated and is divided into price and non-price competition. What does it mean? Let's figure it out.

Price - this is competition that arises by artificially knocking down the price of a particular product.

Non-price is the improvement of conditions for sales. Modernization of equipment, improvement of the quality of the product itself, new technologies, etc. Aimed at the sale of a fundamentally new product or an improved version of a previously released model. But in a monopoly, non-price competition loses its significance. What to do?

Antimonopoly legislation of Russia - regulation of the economy at the state level

In the Russian Federation today, all forces are aimed at reviving from the ashes the sick economy of the country, killed by the monopoly.

There are two types of antitrust laws:

• Fight against artificial monopoly;
• Fight against natural monopoly.

Methods of antimonopoly policy of the Russian Federation

Better than force, in the Russian Federation there were no means of combating monopolists. Continuous restrictions and laws on restriction, which "sideways go out" to the development of healthy competition. What taboos are in fashion these days?

• Prohibition of the development of agreements restricting competition.
• Prohibition of enterprises to use their position to the detriment of competition.

As practice shows, 60% of companies “suffer” from the above violations. And this is the official data. But let's not forget about the "shadow". There, the owners can only dream of law and order.

In addition to these violations, you can often encounter statements about:

• imposing deliberately unfavorable terms of cooperation;
• indiscriminate pricing.

Despite the prohibitions from the authorities of the Russian Federation, indefatigable businessmen find loopholes in the laws for illegal manipulations.

Antimonopoly control tool

As an antimonopoly tool, a registry created to debug economic processes is used. Economic realities show all the imperfection of this law, since there are more than 4,000 monopolists in the country, 500 of which are natural ones.

Alas, monopoly companies create a product that an ordinary citizen cannot do without, but because of greed and inefficient management, the costs of companies are growing, and an ordinary Russian has to pay for their incompetence.

One of the brightest (in all respects) examples of a natural monopoly is GAZPROM.

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Competition (lat. concurrere - to compete) - rivalry between participants in the market economy for the best conditions for the production, purchase and sale of goods. Such an inevitable clash is generated by objective conditions: the complete economic isolation of each market entity, its complete dependence on the economic situation and confrontation with other contenders for the highest income.

The struggle of private commodity owners for economic survival and prosperity is the law of the market.

The essence of competition is manifested in the fact that it. on the one hand, it creates such conditions for which the buyer in the market has a great many opportunities to purchase goods, and the seller - to sell them. On the other hand, two parties take part in the exchange, each of which puts its own interest above the interest of the partner. As a result, both the seller and the buyer, when concluding an agreement, must make a mutual compromise in determining the price, otherwise the agreement will not take place, and each of them will incur losses.

An indispensable condition for competition is the independence of subjects market relations from certain "higher" and external "forces. This independence is manifested, firstly, in the ability to independently make a decision on the production or purchase of goods or services; secondly, in the freedom to choose market partners. In the process of competition, economic entities seem to mutually control Competition is also an important instrument for regulating the proportions of social production under market conditions.

There are the following functions of competition:

identification or establishment of the market value of the goods;

equalization of individual values ​​and distribution of profits depending on the various costs of labor;

regulation of the flow of funds between industries and industries.

There are several types of competition. Consider the classification of types of market competition on a number of grounds.

Types of competition by scale of development

According to the scale of development, the following types are distinguished:

individual (one market participant seeks to take his place under the sun - to choose the best conditions for the sale of goods and services);

local (among the commodity owners of some territory);

sectoral (in one of the market sectors there is a struggle for the greatest income);

intersectoral (rivalry between representatives of different market sectors for attracting buyers to their side in order to extract more income);

national (competition of domestic commodity owners within a given country);

global (the struggle of enterprises, economic associations and states different countries on the world market).

According to the nature of development, competition is divided into free and regulated. Also, competition is divided into price and non-price.

Price competition arises, as a rule, by artificially knocking down prices for these products.

Non-price competition is carried out mainly through the improvement of product quality, production technology, innovation and nanotechnology, patenting and branding and the conditions for its sale, "serving" sales.

Types of competition depending on the fulfillment of the prerequisites for competitive market equilibrium

There are perfect and imperfect competition.

Perfect competition is competition based on the fulfillment of the prerequisites for competitive equilibrium, which include the following: the presence of many independent producers and consumers: the possibility of free trade in factors of production; independence of business entities; homogeneity, comparability of products; Availability of market information.

Imperfect competition is competition based on a violation of the prerequisites for competitive equilibrium. Imperfect competition has the following characteristics: division of the market between several large firms or complete domination: limited independence of enterprises; product differentiation and market segment control.

Types of competition depending on the ratio of supply and demand (goods, services)

The following types of competition can be distinguished (varieties of perfect and imperfect competition):

• oligopolistic:

  monopoly.

Pure competition is an extreme case of competition and belongs to the type of perfect competition. The key characteristics of a market of pure competition are: a large number of buyers and sellers who do not have sufficient power to influence prices; undifferentiated.

Oligopolistic competition is imperfect competition. The key characteristics of the market of oligopolistic competition are: a small number of competitors that create a strong relationship; greater market power: the strength of a reactive position, measured by the elasticity of the firm's responses to the actions of competitors; the similarity of goods and the limited number of their standard sizes.

Monopolistic competition is competition of an imperfect kind. The main characteristics of the market of monopolistic competition: the multiplicity of competitors and the balance of their forces; product differentiation

Types of competition depending on the ratio of the number of business entities regarding the investment of capital in the field of production or marketing

There are intra-industry and inter-industry types of competition.

Intra-industry competition is competition between the subjects of the industry for more favorable conditions for the production and marketing of products, obtaining excess profits. Intra-industry competition is the starting point in the mechanism of competition. The main functions of intra-industry competition:

the possibility of establishing the social, market value of the goods and the market equilibrium price;

stimulation of scientific and technological progress;

economic coercion to improve production efficiency;

identification of weak, less organized producers;

limiting the economic power of leaders.

Intersectoral competition is competition between entrepreneurs in various industries for a more profitable investment of capital based on the redistribution of profits. The emergence of intersectoral competition is based on unequal conditions of production (different structure of capital and the rate of its turnover, fluctuations in market prices), leading to different rates of profit.

Main functions of intersectoral competition:

the possibility of modernizing industries, as new enterprises are created on a progressive scientific and technical basis:

strengthening of intensification, growth of production efficiency;

optimization of sectoral proportions, restructuring of the economy.

Types of competition in accordance with the need underlying the product

There are horizontal and vertical types of competition.

Horizontal competition is competition between producers of the same product. It is a kind of intra-industry competition, i.e. competition for the best production of functional properties and product parameters.

Vertical competition is competition between manufacturers of different products that can satisfy the same customer need. For example, with the help of a TV, you can satisfy the need for information, leisure, education, etc.

Types of competition depending on the ratio of supply and demand for a particular product

There are the following types of competition, which are varieties of intra-industry competition: the competition of sellers of goods and the competition of buyers of goods.

The higher the degree of seller competition, the lower the degree of buyer competition and vice versa. The vectors of action of these two tendencies are opposite, and their impact on society is the same, so there is a certain balance between them. When the supply and demand curves interact, a period of relative equilibrium arises, which has three phases: short-term. medium and long. In a short-term equilibrium, price is determined by demand. As the time period lengthens, the price is already determined by the value, i.e. costs.

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Competition is the struggle between enterprises for the most favorable conditions for production and marketing in order to achieve the best results of their business activities.

In a market system, the main content of competition is the struggle for the consumer, the complete satisfaction of his needs. This is a struggle for market share, the success of which depends on the cheapness and quality of goods.

Two main forms of competition:

Intra-industry;

Intersectoral.

Intra-industry competition - competition between producers of the same industry, when enterprises with higher than average labor productivity receive additional profit, and technically and organizationally backward enterprises, on the contrary, lose part of the individual value of the goods they produce and go bankrupt.

Intersectoral competition - competition between enterprises of different industries. It is expressed in the overflow of capital from industries with a low rate of return to industries with a high share of profit.

Distinguish:

Perfect (free) competition;

Imperfect competition.

The main features of free competition:

1. Unlimited number of participants in the competition, free access to the market and exit from it: each person has the right to engage in entrepreneurship or stop doing business. You can do this in different ways:

Start your own bissnes;

By taking a direct part in labor;

Hire workers;

Buy shares;

Buy government bonds;

Put money in the bank;

Invest them in real estate;

2. Absolute mobility of material, labor, financial and other resources - a competitor invests his money not just like that, but for the sake of increasing income.

3. Full awareness of each participant in the competition (about supply and demand, prices, profit margins, etc.) allows you to make the right, best choice, for example, between buying a house and acquiring shares (in the latter case, the participant needs to know which shares will bring him the maximum income).

4. No participant in free competition is able to influence the decisions made by other participants. Since their number is very large, the contribution of each manufacturer-seller to the total volume of production and supply is insignificant, so the price for which he is going to sell his product is almost not reflected in the market. Thus, real price levels are set by some "invisible hand" (market mechanism).

The market of imperfect competition assumes:

Pure monopoly;

Monopolistic competition;

Oligopoly.

Pure (absolute) monopoly. Such a monopoly exists if one firm is the only producer of a product that also has no close substitutes.

This model has four characteristic features:

The seller acts as the only one, and the industry is a synonym for the firm, since there is only one firm;

The realized product is unique, i.е. there are no good or close substitutes for it (the situation is typical for some commodity industries or for cases where a firm supplies in principle New Product);

The monopolist has market power, controls prices, deliveries to the market;

On the way to enter the market of a monopolist, barriers, both natural and artificial, that are insurmountable for a competitor, are established.

In the first case, one speaks of natural monopolies. These are public utilities - electric and gas companies, water supply companies, communication lines and transport companies. Indeed, it is quite difficult to assume that the subway will have a competitor. As a rule, in countries with a market economy, such natural monopolies are either owned by the state or operate under its strict control.

Monopolistic competition is a market situation in which a relatively large number of manufacturers offer similar but not identical products.

In this situation, the presence of thousands or even hundreds of firms on the market is not required, as in perfect competition, a few tens are enough. Under conditions of pure competition, firms produce standardized or homogeneous products, under monopolistic competition - differentiated.

Differentiation affects primarily the quality of a product or service, due to which the consumer develops non-price preferences. Products can be differentiated by terms of after-sales service, proximity to customers, intensity of advertising, etc.

Consequently, firms in the market of monopolistic competition enter into rivalry not only (and even not so much) through prices, but also through all-round differentiation of products and services.

What is monopolistic in this model? Each firm in terms of product differentiation has some degree of monopoly power over its product; it can raise or lower the price of it regardless of the actions of competitors, although this power is limited both by the presence of producers of similar goods and by considerable freedom of entry into the industry. In addition, in the markets of monopolistic competition, along with small and medium-sized firms, very large firms can also operate.

Oligopoly. The main feature is the small number of participants in the competition. When a relatively small number of firms (within a dozen) dominate a particular market for goods or services, the industry should be recognized as oligopolistic.

Oligopolies can produce both homogeneous and differentiated goods. Homogeneity prevails in the markets of raw materials and materials, semi-finished products (ore, oil, steel, cement, etc.), differentiation - in the markets of consumer goods.

The small number of firms contributes to their monopolistic agreements: to fix prices, divide or allocate markets, or otherwise limit competition between them. As a result, oligopoly approaches monopoly.

According to the methods of action, there are:

price competition;

Non-price competition.

Price competition involves selling goods or offering services at lower prices than other competitors.

In a civilized market, price reduction occurs either by reducing production costs or by reducing profits. Small and medium-sized firms, in order to stay in this market, usually claim only a small share of the profits. Large monopolies sometimes refuse to make a profit at all, in order to completely oust competitors from the market with the help of low prices for the corresponding product, and subsequently raise prices and thereby compensate for the losses incurred.

Non-price competition involves the supply of goods of higher quality, with better indicators of reliability and service life, with higher productivity, as well as a wider range.

Of particular importance are such product parameters as environmental friendliness, energy intensity, aesthetic indicators, and safety.

In the competitive struggle, the reliability and reputation of the manufacturer or supplier of goods, prestige began to play an increasingly important role. In recent years, non-price competition associated with the rivalry for achieving the highest quality products has acquired a dominant role. Trademarks and trade firms are becoming an important instrument of competition in the market.

In the context of a tough struggle between producers, methods are often used that are associated with the violation of the norms and rules of competition, i.e. unfair competition.

It is expressed in:

Dumping prices - the sale of goods at a price below cost;

Establishing control over the activities of a competitor;

Abuse of a dominant position in the market;

Establishing discriminatory prices or commercial terms;

The dependence of the supply of specific goods or the provision of services on the acceptance of restrictions on the production or distribution of competing goods;

The introduction of restrictive conditions and agency agreements in the sale of products, determining when, to whom, in what quantities and under what conditions to deliver;

Secret collusion at the auction;

Unfair copying of goods and products of competitors;

Violation of standards and conditions for the supply of goods and services.