Editing State monopoly (section)

== Characteristics of state monopolies ==
A state monopoly can be characterized by its commercial behavior not being effectively limited by the competitive pressures of [[Company|private organisations]].<ref>{{Cite book |url=http://www.bloomsburycollections.com/book/the-regulation-of-the-state-in-competitive-markets-in-the-eu |title=The Regulation of the State in Competitive Markets in the EU |date=2007 |publisher=Hart Publishing |isbn=978-1-84113-497-0 |doi=10.5040/9781472560124.ch-004}}</ref><ref>{{Citation |last=Gordon |first=Richard L. |title=Problems of Environmental Impacts and Regulating Business Practices |date=1994 |url=http://dx.doi.org/10.1007/978-1-4615-2620-9_10 |work=Regulation and Economic Analysis |pages=129–147 |place=Boston, MA |publisher=Springer US |doi=10.1007/978-1-4615-2620-9_10 |isbn=978-1-4613-6123-7 |access-date=2022-05-02|url-access=subscription }}</ref> This occurs when its business activities exert an extensive influence within the [[Market (economics)|market]], can act autonomously of any [[Competition|competitors]], and potential competitors are unable to successfully compete with it.<ref>{{Cite book |last1=Berg |first1=Sanford V. |url=http://dx.doi.org/10.1017/cbo9780511572067 |title=Natural Monopoly Regulation |last2=Tschirhart |first2=John |date=1989-01-27 |publisher=Cambridge University Press |doi=10.1017/cbo9780511572067 |isbn=978-0-521-33039-8}}</ref><ref name="Weber Waller 504–504">{{Cite journal |last=Weber Waller |first=Spencer |date=2006-09-01 |title=Book Review: ''Economics of Regulation and Antitrust'', W. Kip Viscusi, Joseph E. Harrington, Jr., and John M. Vernon (MIT Press, Cambridge, Massachusetts & London, England, 4th Edn, 2005) |url=http://dx.doi.org/10.54648/woco2006035 |journal=World Competition |volume=29 |issue= 3 |pages=504 |doi=10.54648/woco2006035 |s2cid=248274219 |issn=1011-4548|url-access=subscription }}</ref>

These activities have a major influence on the operational environment, when its trading activities are not subject to competitive forces inherent within [[Free trade|free trading markets]].<ref>{{Cite journal |last1=Li |first1=Shuai |last2=Cai |first2=Jiannan |last3=Feng |first3=Zhuo |last4=Xu |first4=Yifang |last5=Cai |first5=Hubo |date=February 2019 |title=Government contracting with monopoly in infrastructure provision: Regulation or deregulation? |url=https://linkinghub.elsevier.com/retrieve/pii/S136655451830913X |journal=Transportation Research Part E: Logistics and Transportation Review |language=en |volume=122 |pages=506–523 |doi=10.1016/j.tre.2019.01.002|bibcode=2019TRPE..122..506L |s2cid=159127679 |url-access=subscription }}</ref> Therefore, this results in using its [[Dominance (economics)|market dominance]] and influence to its advantage, in affecting how the market evolves over a long period of time.<ref>{{Cite book |last=Allen |first=G. C. |url=https://www.taylorfrancis.com/books/9781136510861 |title=Monopoly and Restrictive Practices |date=2013-11-05 |publisher=Routledge |isbn=978-1-136-51086-1 |edition=0 |language=en |doi=10.4324/9781315016597}}</ref> This is especially the case if the state monopoly controls access to vital inputs essential to operating within the market.<ref>{{Cite journal |last1=Sibley |first1=David S. |last2=Doane |first2=Michael J. |last3=Williams |first3=Michael A. |last4=Tsai |first4=Shu-Yi |date=October 2004 |title=Pricing Access to a Monopoly Input |url=https://onlinelibrary.wiley.com/doi/10.1111/j.1467-9779.2004.00179.x |journal=Journal of Public Economic Theory |language=en |volume=6 |issue=4 |pages=541–555 |doi=10.1111/j.1467-9779.2004.00179.x |issn=1097-3923|url-access=subscription }}</ref> 

The high degree of autonomy and ability to act independently in the market, has been demonstrated by the ability to alter relationships with its [[customer]]s to its advantage, without negatively impacting its dominant market share.<ref name="Weber Waller 504–504"/><ref>{{Cite journal |last1=Grunichev |first1=A.S. |last2=Mierin |first2=L.A. |last3=Yagudin |first3=R.Kh. |last4=Fakhrutdinov |first4=R.M. |date=2015-02-01 |title=Institutional Features of Interaction of the State and of Natural Monopolies |url=https://www.richtmann.org/journal/index.php/mjss/article/view/5673 |journal=Mediterranean Journal of Social Sciences |doi=10.5901/mjss.2015.v6n1s3p73|doi-access=free }}</ref> A state monopoly's ability to increase the [[price]] or quantity of [[goods and services]] provided, without a relational change in its own [[operating cost]]s (coupled with maintaining this price or quantity at above a [[Market clearing|market clearing rate]]), demonstrates its ability to disregard any competitive forces within the market.<ref>{{Cite journal |last1=Peck |first1=James |last2=Rampal |first2=Jeevant |date=October 2019 |title=Non-optimality of state by state monopoly pricing with demand uncertainty: An example |url=http://dx.doi.org/10.1016/j.econlet.2019.108561 |journal=Economics Letters |volume=183 |pages=108561 |doi=10.1016/j.econlet.2019.108561 |s2cid=200077285 |issn=0165-1765|url-access=subscription }}</ref> A state monopoly also retains the ability to reduce service value, or impose restrictive [[Contractual term|terms and conditions]], without experiencing a loss in [[market share]].<ref>Gordon. (1994). ''Regulation and economic analysis : a critique over two centuries'' (1st ed. 1994.). Springer-Science+Business Media, B.V.</ref>