The Legal Economic Analysis Of Monopoly--By Means Of The Drawing Of The Market's Boundaries

The legal economic analysis of monopoly is to discourse what is the monopoly, how to verdict the monopoly and how to value the monopoly by means of the analysis of the market structure. This article just try to establish a criterion to verdict the monopoly and non-monpoly through the discussion about the monopolistic production condition. This article consist of three parts, as follows:The first part points out the error of the orthodox theory with equating one company's market shares with the power of monopoly from the opposite perspective. with three opposite example, it discourses thoroughly that the market shares is not the power of monopoly from the four angles as follows:the selects of market sphere,potential competition,technicial innovation and demands elasticity, and points out the extreme complexity and inaccuracy in figuring out the market share itself, and drawing this conclusion:"The process of verdicting that whether the monopoly exists is a finding process, namely finding out whether a competitor exists. If we find there is a competitor, we can verdict that the monopoly doesn't exist. Furthermore, getting monopoly profit needs customer's cooperation and the customer will not cooperate if there is no necessity when the price is too high. Then if we want verdict that whether the monopoly exists, we need verdict that whether the customer must buy it in fact. On the whole we can conclude that: verdicting whether the monopoly exists is mostly verdict the two points, one is whether the competitor exists and other is whether the customer must purchase, And to the former we can say "yes" if we find one of the following possibility: the first, whether the customer can purchase the same or similar commodity freely with the reasonable price; second, the second entry is free; and the third, technicial innoviation makes the improvement of goods possible." This conclusion is the core of this article, is the main idea which guide other parts of this article. However, the conclusion only can indicate at which conclusion the monopoly will not be established from the reversed side, but can't offer a frame from the front side. So this article will indicate several factors after that. The first factor is that the customer has no alternationï¼›the second is that it can prevent the new competitor enter the marketï¼›the third is that the commodity is shorts of demands elasticity and the final is that there is no possible in technicial innoviation. Through the positive and oppositive angle, I believe we can make a concrete conclusion when we must verdict whether the monopoly exists.In the second part of this article, the author makes research in the core of the monopoly---"relevant market". We can draw conclusions from the first section that the requisition to verdict the exist of monopoly is the drawing of the market's boundaries. "Market" is just the boundary and the area of competition. The drawing of the relevant market's boundaries is the core of the antitrust law, and is the core of controversy in every country. The traditional theory considers that the market shares equate with the monopolistic power, but if we can't draw the relevant market's boundaries, the market shares will not be correct. The competition will be divided into two sections in this article:the realistic competition and the potential competition. According to the two kinds of competitions, the market will be divided into the realistic market and the potential market. The first one regards the customer as the basic point and the second one regards the supplier as the basic point. The realistic market can be divided into the product market and the geographic market. Only to draw the realistic market's boundaries is not enough. The market is a dynamic concept; the reason why the corporation in the dominant position in the realistic market can't monopolize the market is the existence of the potential competition. The area of the potential conception is the potential market. Under the normal market conditions, some corpo...