(Microeconomics) The Theory of Monopoly - Essay Example

Professor of Cambridge University Joan Robinson (1933) made a report with decisive critics of the newly conservative competition conception. In her work ‘Economic theory of imperfect competition’ she claimed, that the research of various objective laws of the economic theory was usually started with the consideration of the perfect competition’ conditions, treating monopoly as the corresponding peculiar case, while it was more correct to start any similar research with the monopoly consideration, treating the perfect competition’ conditions as a special case.

(Mandler, 2002) In the modern market conditions there is no special classification of monopolies, though in the most general sense they may be divided into the four main classes. The first class is the simple monopoly for these or those products; it can be private or state. The second class is the natural monopoly, when competition is impossible for technical reasons, for example, in the case with railroads, when it is not profitable for the second company to create parallel railways, or with underground, when another company would not build another tunnel next to the already existing one.

The third class can be called the network monopoly, when Microsoft creates such programs as Microsoft Word and Microsoft Excel, and people use them voluntarily, and very actively. In such case it is rather difficult for the competitor to enter the market, because everyone is already used to work with one program; this is, so to say, voluntary, accepted by the buyer, monopoly, and there is also the acting consumers’ network. 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