Monopoly: Economics and Monopolistic Competition

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Monopoly was mentioned in The Code of Hammurabi for the first time (The earliest law in the world, 1792 to 1750 B.C). In Marxian Economics, monopoly means someone who controls the price, commodity circulation and funds to cash with strong financial resources. American economists’ E. H. Chamberlain (The Theory of Monopolistic Competition, Harvard University Press, 1969) said: “The causes of the monopoly are the government’s special permission, technology and key resource monopoly and natural monopoly.” The first type means the government gave the exclusive rights to a corporation to produce or serve. Technology and resource monopoly, it means one kind of commodity materials or technology is only owned by one company. Last one is natural monopoly, which means the manufacturer can produce better products with less cost than other manufacturers

However, there was a completely special type of market appearing in 1933. E. H. Chamberlain propounded a new theory called monopolistic competition in his book “The Theory of Monopolistic Competition” in 1933. At the same time, Joan Robinson (a UK economist, 1903-1983) wrote a book: “Economics of Imperfect competition” and constituted the theory of Monopolistic competition with Chamberlain. Monopolistic competition is a kind of structure in market intervenes between monopoly and perfect competition. It avoids other two extremes in market called monopoly and perfect competition, because there will be a number of companies to compete but all of them are able to control the market. For example, the Mac, windows and Linux computer system, they control all the computer system market but they also compete with each other. Also, PEPSI and Coca Cola also can prove existence of monopolistic competition.

Monopolistic competition is an economic structure and the characteristic of monopolistic competition is characterized by a number of opposite companies. Secondly, the wars are similar but identical. Chamberlin said...
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