In economics, the term monopoly describes a special form of the market. It can affect both sides of the market. Either a single supplier faces many smaller buyers (supply monopoly) or several suppliers can only sell to a single buyer (demand monopoly).
The monopolist must mainly make decisions about the price or the offered or demanded quantity of his product. In extreme cases, only one party can face each other on both sides. This is known as a bilateral monopoly.
Types of monopolies
There are three types of monopoly:
- natural monopoly
- legal monopoly
- economic monopoly
Natural monopoly – Beim natürlichen Monopol verhindern hohe Fix- und niedrige Marginal cost die Etablierung von Konkurrenten am Markt. In diesem Fall ist es deutlich wirtschaftlicher, wenn ein großes Unternehmen den gesamten Markt versorgt, als wenn viele kleine Unternehmen sich diese Aufgabe teilen.
Legal monopoly - The legal monopoly, on the other hand, is artificially protected by the state. Patents or legal requirements give the monopolist a special degree of security.
Economic monopoly - The economic monopoly is again divided into two subspecies, the original and the contractual monopoly. While the original monopoly is based on the fact that the provider alone provides the basic requirements for the monopoly, the contractual monopoly is the joint decision of several companies to jointly create a monopoly situation.
Examples of monopolies
The former telecommunications market can be cited as an example of the supply monopoly. Since this monopoly was under the protection of the state, we were also dealing with a legal monopoly.
The arms industry is often used as an example of the monopoly of demand. Here, the state is the sole buyer.