Natural monopolies and methods of regulation of their activities. Monopoly regulation. competition for a monopoly market

Most pure monopolies are natural monopolies and are therefore subject to public regulation. A natural monopoly takes place in the sectors of gas, water and electricity supply (a similar situation develops in the markets of some agricultural products that are produced on plots of land of exceptional quality - Czech beer, French champagne, etc. Here we can also talk about natural monopolies, because the amount of such land is limited). Most often in industries of public consumption ( public utilities) there is a possibility of abuse by natural monopolies, which can negatively affect the standard of living of the population. First of all, we are talking about raising tariffs and prices by monopoly enterprises. This leads to an increase in production costs in other industries, and hence to an increase in prices for other goods. (This is exactly the picture that can be observed in the case of an increase in prices by the main natural monopolists in Russia - RAO Gazprom, RAO UES of Russia, the Ministry of Railways and Communications.) These facts necessitate state regulation such firms by special administrative bodies. There are two possible options actions of the state in this case:

1. Establishment of state ownership of enterprises - natural monopolies, and, consequently, state prices for their products.

2. State regulation of natural monopolies by setting a marginal level of profitability or by directly limiting the price level for products of natural monopolies. AT developed countries- this is the main way to combat the negative aspects of the activities of natural monopolies.

When analyzing the issues of regulating the activities of natural monopolies through control over pricing for natural monopoly goods, it will be interesting to consider the theoretical model of a regulated monopoly. Consider this problem for specific example hypothetical natural monopoly, the main parameters of which will be characterized by the position of the graphs shown in the figure. The monopoly maximizes profit at point E (MR = MC) with the volume of production Q opt and the price P A. In this case, as can be seen from the graphs, the price is not equal to marginal cost, i.e., the requirement of efficient allocation of resources in the economy is not met. From the point of view of society, this is a significant shortcoming, and it is desirable to correct it. The optimal situation would be the equality of price and marginal cost.

In our case, the demand schedule and the marginal cost schedule intersect at point B, respectively, the price for this product, which would suit society, is Pv. If the government sets a price limit for a monopoly product in the amount of P B, then the demand curve will look like a broken line P B B D x . Thus, the state artificially introduces into the economy an element similar to pure competition, and therefore, at point B under these conditions, the monopoly firm will maximize profits or minimize losses (which happens more often). This situation suits the state, and the price P in is called the socially optimal price. However, in most cases this price does not cover the average gross cost of the firm, and it incurs losses. Since P B is below the minimum value of ATC, the company incurs losses at any volume of production, which in the long run is fraught with bankruptcy.

The way out of this situation can be as follows:

Provision by the state of subsidies to regulated natural monopolies;

Consent to the price discrimination that these firms can exercise in relation to consumers; in this case, the marginal revenue schedule will coincide with the demand schedule for the monopoly product;

Most often, in reality, these firms are given the opportunity to earn normal profits at the expense of efficient use resources; i.e., the price will correspond to the value of ATC - P c (projection of the point of intersection of the ATC and D x graphs on the y-axis).

In most cases, the state faces the problem of what to prefer - the inefficient allocation of resources or the inefficient functioning of individual firms.

In natural monopolies, the volume of demand and supply is determined to a decisive extent by technology, and equipment and other elements of the production cycle are difficult to mass-produce and duplicate (this is energy, a number of modes of transport, communications, water supply, etc.). Those. A natural monopoly occurs in a market when one large firm is able to produce a product at a lower cost than several smaller firms. A natural monopoly is characterized by a decrease in average production costs with an increase in output at any volume, so that the production efficiency of a large firm is higher than that of small firms.

Natural monopolies to a large extent determine the entire structure of production and consumer prices, affect the economic and financial processes, the dynamics of incomes of the population.

The reasons for the emergence of a natural monopoly can be:

Features of a technology that has a positive return on scale for any volume of output;

Diversity savings of a multi-product firm producing different types of products using the same production facilities;

Insufficient market capacity compared to minimally efficient output.

If the industry is a natural monopoly, this gives the firm the ability to charge a price above cost and limit output beyond what is optimal for society. Those. natural monopoly enterprises cannot be organized on the basis of free competition (then they turn into oligopolies and, with a reduction in production volumes, set monopoly prices, which gives rise to price increases in other industries). Such an industry requires certain measures on the part of the government to achieve the efficiency of production and allocation of resources. The executive branch is responsible to the parliament for the functioning of the branches of natural monopolies.

The main forms of state regulation of natural monopolies are:

1. Pricing for products of natural monopolies;

2. Limiting the profitability of a firm - a natural monopoly;

3. Regulation of property relations for firms operating in the market of natural monopolies.

1. Prices and tariffs for the products of natural monopolies are the main object of regulation. Natural monopoly pricing schemes have the overall goal of reducing the public welfare loss from monopoly power without sacrificing productive efficiency.

The Government of the Russian Federation approves the list of goods (services) whose prices on the domestic market are subject to regulation. Prices (tariffs) for the products of natural monopoly entities sold to enterprises are set on the basis that their increase should not exceed the increase in prices of industrial producers (excluding light and food industry products) predicted by the Ministry of Economic Development of Russia.


One of the problems associated with the pricing of a natural monopoly product is the problem of product quality. Under a regulated price, the firm has no incentive to improve the quality of the product. Moreover, at a given government-set price, a firm can increase profits by lowering production costs by lowering the quality of the product. In the absence of competition in the market, the decline in product quality does not have a significant impact on its position. Theoretically, the state can use two levers: the inclusion of quality indicators in the list of regulated standards and the practice of compensating consumers for losses at the expense of the manufacturer in the event of a decrease in the quality of goods below an acceptable level. But even this does not create incentives for quality improvement.

2. Direct regulation of prices for natural monopoly products by the state can be replaced by control over the level of profitability. This is the method used in the US practice. Establishing a maximum rate of return as compared to an unregulated natural monopoly leads to lower prices and higher sales. From the point of view of society, limiting the rate of return leads to an increase in welfare. The state either forbids monopolists to have excess profits, or redistributes excess profits in its favor so that competition can be balanced.

However, many economists believe that adjusting the rate of return has a significant side effect on investment decisions regulated firm. There is a so-called excess investment (the firm seeks to replace other used factors of production with capital resources).

3. Transfer of enterprises to state property is the most radical form of regulation of natural monopolies.

One of the possible ways to reduce the losses of society from monopoly power, alternative to direct regulation of the company's activities, is to stimulate competition in the natural monopoly market. The most difficult issue is the problem of determining the optimal sharpness of competition. As applied to potentially competitive segments of the scope of natural monopoly public policy should be to stimulate the entry of new firms and reduce entry barriers to the market.

In a number of cases, the gain in production efficiency provided by a single producer does not compensate for the losses of society from the abuse of monopoly power. Then it is expedient for the state to go for the reorganization of the natural monopoly industry by disaggregating manufacturing firms. In industries where reorganization or deregulation is not possible or desirable, alternative way Strengthening competitive elements is the development of competition for the right to enter the industry, for the right to be the sole supplier of this product.

The state sells a natural monopoly the right to carry out a particular type of activity in the form of franchising. A similar method of state regulation is used in natural monopoly industries such as oil production, freight transportation, television and radio broadcasting. The advantage of franchising is that it provides an effective constraint on the activities of the monopolist, since there is always the threat of non-renewal of the contract if its conditions are not met.

In the economy of modern states, there are always such areas in which the preservation and maintenance of market competition is impractical due to its economic inefficiency or for other reasons, among which is the provision of the national security system of the country. Antimonopoly policy, therefore, does not mean the elimination of monopoly altogether. It should be based on a thorough inventory of markets, on their differentiation into competitive markets and, in principle, non-competitive, i.e. those where maintaining a monopoly is economically justified. The spheres of the economy excluded from market competition are the so-called natural and state monopolies.

natural monopoly- such a state of the commodity market, in which the satisfaction of demand is more efficient in the absence of competition due to the technological features of production (due to a significant decrease in production costs per unit of goods as the volume of production increases). Goods produced by subjects of natural monopoly cannot be replaced in consumption by other goods; demand in a given commodity market depends to a lesser extent on changes in the price of this commodity than demand for goods of other types. World experience shows that such production conditions are typical for the so-called public use enterprises, which, in particular, include electricity, water and gas supply enterprises, telephone service, etc. According to the Federal Law of August 17, 1995 No. 147-FZ “On Natural Monopolies”, these include:

  • transportation of oil and oil products through main pipelines;
  • transportation of gas through pipelines;
  • transfer services electrical energy;
  • thermal energy transmission services;
  • rail transportation;
  • services of transport terminals, ports, airports;
  • services of public electric and postal communication;
  • services for operational dispatch control in the electric power industry;
  • services for the use of inland waterway infrastructure;
  • disposal of radioactive waste;
  • water supply and sanitation using centralized systems, communal infrastructure systems;
  • icebreaking pilotage of vessels, ice pilotage of vessels in the water area of ​​the Northern Sea Route.

A natural monopoly, like any monopoly, carries the possibility of abuse of monopoly power by its subjects. These abuses are possible when setting prices and tariffs for goods and services of industries that are natural monopolies when determining production volumes, distributing products among individual consumers, etc. To prevent abuses, the state should regulate the activities of natural monopolies by developing a special legal regime such regulation.

The following methods of regulation of natural monopolies are used in Russia:

  • price regulation, carried out by determining prices (tariffs) or their limit level;
  • determination of consumers subject to mandatory service;
  • establishing minimum level their provision in case of impossibility to meet in full the demand for goods produced by the subject of natural monopoly.

State regulation of natural monopolies is based on maintaining a balance of interests of consumers and subjects of natural monopolies.

Along with natural monopolies, other areas of activity, called state monopolies. Preservation of competition in these industries is inexpedient not only because of its economic inefficiency, but also because of the special role of these industries in shaping the general conditions of economic and economic development. social development country, ensuring national security, as well as the special social significance of the goods and services produced.

The subjects of state monopoly in Russia are, as a rule, state unitary enterprises that have licenses to carry out certain types of activities.

Types of state monopoly:

  • monetary issuing activity carried out central bank countries;
  • certain types of foreign economic activity (export and import of certain goods);
  • often the production and sale of alcoholic products, etc.

The state monopoly regime is of an exclusive nature, its types and boundaries are determined by special laws.

The antimonopoly policy of the state does not mean the total destruction of monopoly. It involves the preservation of certain types of monopolies, ensuring their state regulation. The essence and meaning of any antimonopoly policy is to use the benefits of a large-scale economy and neutralize its possible negative consequences associated with the weakening of competition. It is the combination of these two approaches that constitutes the most intractable legal and economic task that varies depending on the situation.

The system of antimonopoly regulation in Russia is taking shape taking into account the rich foreign experience in this area, but has a number of significant features.

Firstly, it is being formed in conditions when stable market relations in Russia are only in their infancy, only the foundations of a market economy have been created, and state-administrative monopolism has not been completely overcome. The underdevelopment of many market structures in Russia, the absence of some of them increase the burden on the system of state antimonopoly regulation. The tasks of antimonopoly regulation in Russia are wider than the preservation and protection of competition, it must be created anew. Antitrust Law does not in itself create a system of free enterprise and competition. It can successfully operate in an already existing competitive environment. market system protecting and supporting her.

Secondly, in Russia, monopolistic activity includes not only the activities of economic entities, but also the activities government agencies and local governments. Therefore, antimonopoly regulation in Russia extends to the activities of all these entities.

The effectiveness of public administration is largely determined by the competence of public officials, their ability to foresee the immediate and long-term results of the actions taken, as well as the desirability or undesirability of the upcoming consequences. If the state will "press on printing press» to finance social spending, the result will be inflation that devalues cash income population. The ability to correctly understand the emerging economic situation, choose the most adequate measures of state influence on economic processes, to calculate the consequences of decisions made, to maximize benefits and minimize possible costs directly depends on how correctly and completely during the state economic policy the achievements of positive and normative economic theory are used.

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Ministry of Agriculture

Novosibirsk State Agrarian University

Faculty of State and Municipal Administration

Department of Economic Theory and World Economy

Direction: State and municipal administration

courseworkWork

in economic theory

" Methodsstateregulationnaturalmonopolies"

Completed: student 8202 group

Thyssen Ilya

Checked by: Sharavina E.V.

Content

  • Introduction
  • Conclusion

Introduction

There is a very large number of different market conditions, which allows us to talk about the imperfection of markets and consider the fundamental monopoly as a prerequisite for this imperfection.

The country, guaranteeing support for competition (Article 8 of the Constitution), provides this guarantee by establishing a ban on performing economic activity aimed at monopolization and dishonest competition. Such a ban is consistent with the provision of part 3 of article 17 of the Constitution that the implementation of the rights and freedoms of a person and citizen cannot violate the rights and freedoms of other persons. The definition of public law principles in regulation, namely, issues of competition, is considered a required condition for the creation of a civilized market.

In economics Russian Federation in a number of markets for goods and services related, for example, to the transportation of gas through pipelines, railway transportation, services of motor transport terminals, ports, airports, a situation has developed in which the satisfaction of demand in these markets is more successful in the absence of competition due to those distinctive features production. After all, the goods produced by the subjects of this activity are not able to be replaced in use by others, due to which the demand for them depends to a lesser extent on price changes than the demand for other types of goods. Therefore, the regulation of natural monopoly is relevant today. The purpose of the study is to study the methods of state regulation of natural monopolies. In accordance with the goal, the following tasks were set:

Consider the essence of natural monopoly

Consider government regulation of natural monopoly

Consider the features of state regulation of natural monopolies in the Russian Federation

The object of the study is the system of state regulation of the activities of a natural monopoly in Russia

The subject of research is economic relations arising between enterprises and organizations in a natural monopoly.

1. The essence of natural monopoly

1.1 The concept and types of natural monopoly

A natural monopoly is a situation in the market when one enterprise is the only manufacturer of a product that has no close substitutes. This type of monopoly is called a natural monopoly because in this case barriers to entry are based on features of the technology that reflect the natural laws of nature, and not on property rights or government licenses. Forced dispersal of production at several enterprises in this case is inappropriate, it would lead to an increase in costs.

Consider a city water supply. By laying two pipe systems parallel to each other, it is possible to ensure that adjacent houses and even neighboring apartments in the same house, at the choice of residents, can be connected to either of the two water supply companies. Competition became possible, but at the cost of a significant increase in the price of each liter of water delivered to the consumer. Other examples of natural monopolies are Electricity of the net, wired telephone communications, district heating, city sewerage.

The situation of natural monopoly is presented in fig. 1. Here LAC and LMC are long run average and marginal cost curves, D is the demand curve, MR is the corresponding marginal revenue curve. The optimal output and price (Q 1 , P 1) are determined by the intersection of the LMC and MR curves. The profit of the monopolist in this case will be an amount equal to the area of ​​CP 1 AB.

Natural monopoly situation

According to Federal Law No. 147-FZ of August 17, 1995 "On Natural Monopolies", a natural monopoly entity is an economic entity ( entity), engaged in the production (sale) of goods under the conditions of a natural monopoly (clause 3, article 3 of the Law on Monopolies). Federal Law No. 147-FZ of August 17, 1995 "On Natural Monopolies".

Natural monopoly has characteristic features. The first and main feature is the single seller. One firm is the sole manufacturer of a given product or the sole provider of a service; A monopolist is an industry with only one firm. Therefore, such firm and industry are synonymous.

The next most important feature is the absence of substitutes for this product. The product of a natural monopoly is unique in the sense that there are no good or close substitutes. Such monopolies include gas and electric firms and companies, water supply and communications enterprises.

Also feature significant price control exercised by the monopolist. The reason is obvious: the monopolist produces and therefore controls the total supply.

Another important feature is entry into the industry is blocked. Barriers to entry into the industry, which are very significant in the short term, are surmountable in the long term.

And the last no less important feature is the low elasticity of demand, since the demand for products or services produced by natural monopoly entities is less dependent on changes in cost than the demand for other types of products (services), since they cannot be replaced by others. goods. These products satisfy the most important needs of the population or other industries. These goods include, for example, electricity. If we propose, an increase in car prices will force almost all buyers to categorically refuse to purchase a personal car, and they will begin to use social vehicles, then, including a significant increase in electricity tariffs, it is unlikely to lead to a refusal to use it, since it is difficult to replace it with an equivalent energy carrier .

Natural monopoly is also characterized by high initial capital investments, high fixed costs. Not every entrepreneur is able to make such investments and such fixed payments. It is important to note that at the same time it should be noted that a natural monopoly has extremely low marginal costs. Kostenko M.A. Commercial law: textbook. allowance. - Taganrog: TTI SFU, 2010.

Natural monopolies can be of two types:

Natural monopolies The emergence of these monopolies is due to barriers to competition, established by nature itself. For example, a firm whose geologists have found a deposit of unique minerals is ready to become a monopolist. If she buys with all this land plot where the deposit is located, no one else will be able to use it. The law protects property rights, including when they lead to the creation of a monopoly. However, the regulatory intervention of the state, including under these criteria, is not excluded.

Techno-economic monopolies. This is a relative name for monopolies, the origin of which is due either to technical or financial reasons associated with the manifestations of economies of scale. For example, it is unlikely that 2 water supply networks, gas and electricity supply to houses will be created in the metropolis. In other words, it is technically feasible to do this, but it is irrational from a technical and financial point of view.

Also natural monopolies in territorial space: federal, regional, local or municipal.

Particular attention should be paid to local natural monopolies, since they are the most common type of natural monopoly. It is such a state of the local commodity market, in which the satisfaction of demand is carried out more successfully by one manufacturer. It is fair to limit the competitive environment due to the scientific and technical distinctive features of production or the socio-economic criteria of the administrative region, similar to the geographical boundaries of this local commodity market.

1.2 The need to regulate natural monopoly

The need to regulate the situation of natural monopoly has a long history. The concept of natural monopoly was introduced by John Stuart Mill (1848), who emphasized the problem of unjustified (resource-wasting) duplication of transmission networks that could occur in public sectors. Leon Walras developed the connection between natural and regulation in relation to construction and operation railways. The premise that regulation served the purpose of keeping large-scale production running efficiently by controlling the market was part of the so-called "progressive public interest" concept, which was fully applied to the regulation of the public sectors of the twentieth century.

The traditional regulation of natural monopolies has a century-long history. It originated at the turn of the 19th and 20th centuries and expanded significantly in the 1930s. and until the 1960s. applied quite successfully.

Predominantly during this period, it was assumed that the aim of regulation was to secure socially desirable outcomes in all those cases where competition could not be relied upon to achieve them. Regulation through direct intervention in economic processes replaces the "invisible hand", the so-called "visible hand" operates. Nosova S.S. Fundamentals of Economics: textbook. - M.: Knorus, 2012.

In the economy of the USSR, all prices were set in a planned manner, and resources were distributed centrally, as a result, almost no special allocation of sectors of the economy related to natural monopolies was made. The transition to a market economy necessitated the introduction of certain methods of regulation of natural monopolies. This need is due to a number of reasons.

In countries with developed market economies, the modern concept of regulation of natural monopolies implies that the use of state regulation is considered justified when a particular product (service) is produced by the only one economic entity if the condition is observed that competition between similar enterprises is impossible for technological or economic reasons, and the growth in production of a single entity will be accompanied by a decrease in unit costs

Despite the technical efficiency of concentrating production in the hands of one enterprise, market practice reveals many facts of abuse of a monopoly position in the form of overstating costs or inflating profits, which negates the social effect of economies of scale due to the dictate of unreasonably high prices. With all this, similar abuses are often very difficult to recognize from the outside due to the fact that the real state of affairs of the monopolist is usually considered to be carefully concealed information.

Due to the fact that natural monopolies usually create products necessary for the normal functioning of most enterprises and a fundamental significant part of the resources they use, non-payments for the products of natural monopolies result in a non-payment crisis within the country's economy. The spread of non-payments is the result of price discrimination by natural monopolies and others. economic structures who have influence on the market and are not constrained in their own activities by the regulatory influence of the state.

The need for price regulation in natural monopolies is due not so much to the negative consequences of monopoly behavior. There is also an opposite point of view: a reasonable differentiation of prices for products of natural monopolies can serve as a strong tool for the country's economic policy, which allows regulating the economic activity of various sectors of the economy and leveling out its seasonal fluctuations. In other words, the mechanism of influencing the economy through a system of regulated prices is considered to be an effective addition to the fiscal macroeconomic policy.

Russian natural monopoly

2. State regulation of natural monopoly

2.1 Non-price methods of regulation

Over the course of many decades, the state has developed measures to regulate the activities of natural monopolies, built mainly on the principles of direct control using price and non-price regulation devices.

Let's consider non-price methods of regulation. One of these methods is the initiation by the authorities of competition for the market where competition within the market is impossible or burdensome due to the presence of significant economies of scale. Regulatory bodies hold an auction and grant for a certain period of time the right to service (franchise) the market to the enterprise that undertakes to contribute the largest amount to the budget revenue. This type of market competition is sometimes called Demsetz competition, referring to the American economist who first described it. In this case, the volume of output will probably be Q 1 at the price P 1 (Fig. 1), however, part of the profit received by the monopolist will be transferred to the budget as a payment for the right to serve the market. Other things being equal, the greater the number of enterprises competing for this right, the greater part of the profits can be withdrawn to the budget. The disadvantage of this method of regulation of natural monopoly is the "too small" volume of production.

An example of competition for the market can be, for example, the creation in St. Petersburg of alternative services involved in the operation and repair of housing stock. The first competition for the right to provide such services, in which 24 firms participated, was held in 1996. The emerging threat of substitution will stimulate the work of municipal services. Galperin V.M., Ignatiev S.M., Morgunov V.I. Microeconomics v. 2: textbook - St. Petersburg: Economic School, 2009.

The next method is to separate the natural monopoly sector into a separate firm. The essence of the method lies in isolating the natural monopoly link of the monopolist into a separately functioning company with its own management and owner. In accordance with this, the newly emerged company has independent financing from sources of income (provision of services for the transportation of electricity and heat carriers), as well as the cost of repair and re-equipment of key production assets. Another part of the monopoly, which is potentially competitive, enters the federal market and competes with other producers.

This method of regulation is more in the nature of structural reforms, but not regulation, although in domestic conditions this measure becomes a full-fledged non-price method of regulation. This is confirmed by the creation of a fresh structure of monopoly economic relations (in general, the emergence of several smallest firms from one firm, in particular, the allocation of a natural monopoly and competitive sector), which, in terms of the degree of impact, is inherent exclusively in non-price methods of regulation.

So, in the Russian Federation, on April 1, 2010, a new carrier began to work - Federal Passenger Company OJSC (FPK) as a branch of Russian Railways OJSC, responsible for the sphere of passenger transportation. With all this, it singles out 2 sectors of work - competitive and public (regulated), which differ in the principles of doing business.

In general, this method can be considered promising for application in financial practice, although in domestic conditions one should take into account the likely negative consequences due to the resulting technical structure of production, for example, in the energy supply sector.

There is also another non-price method - quality control of natural monopoly goods. This kind of non-price regulation of natural monopolies is based on the traditional premise that all goods and services must have a certain standard of quality in production and final output. For example, the production of pipes for a gas transmission system must meet strength standards (pressure, corrosion resistance, diameter, metal alloy, and so on), and non-compliance with these requirements may result in consumers refusing to purchase the product and losing the buyer.

This method of regulation is considered quite labor-intensive from a technical point of view and requires investment Money on the part of consumers, the state or on the part of a monopoly (for example, installation of equipment). Obviously, the question of who is obliged to bear the costs associated with the installation of equipment can only be decided by the authorities, but not by the monopolist itself or the final buyer. With all this, when resolving this issue, it will be necessary to proceed from the prevailing Russian realities and, in particular, to take into account the low standard of living of the majority of the population of the Russian Federation. Zhuravleva G.P. Economic theory. Microeconomics-1,2: textbook - M .: "Dashkov and Co", 2010.

The actual use of the method will make it possible to create the prerequisites for the correct behavior of the monopolist in relation to the final consumer, who will have a real chance to control the quality of the product he uses.

It is customary to single out another non-price method - this is the obligatory service of certain groups of consumers.

The content of the method is quite precise: a natural monopoly firm is obliged to provide services to certain groups of buyers in the absence of timely payment for the services provided. A specific category of consumers in Russia includes all objects that support state security (military units, premises of law enforcement agencies, etc.), as well as socially important objects of life.

The effectiveness of the application of this method is not in doubt, because we are talking about state security and its implementation in all likely cases, regardless of the one-sidedness of the application. The benefit in the short run is received exclusively by the buyer, respectively, in long term- the whole society.

The introduction of this non-price method of regulation reflects in many respects the features of the transitional state of the economy, which at this moment is the Russian economy. Obviously, in developed countries market economy, debugged security system, there are no problems. The duration of the application of this method of regulation under conditions Russian economy defined by the following conditions: end transitional nature the Russian economy, strengthening its market character; improvement economic situation public sector and welfare of the population.

2.2 Price regulation methods

The price method of regulation of natural monopolies is the setting of prices or marginal tariffs for the products of companies.

One of the price methods of natural monopoly regulation is Ramsey pricing. In order to prevent losses and approach the competitive effect, the value of the price that the government sets for the product of a natural monopolist is guided by average production costs.

This price is called the "Ramsey price" after the economist who proposed this pricing method. Mathematically, it can be represented as follows:

(P i -MC i) /P i = k / e i ,

where P i - price of goods i;

MC i - marginal cost of production of goods i;

e i - elasticity of demand for product i at its price;

k - constant (selected so that the break-even condition is met).

The same rule can be formulated differently if we know the optimal volumes of output of all products of a natural monopoly, i.e. e. volumes satisfying demand, set by prices equal to marginal cost. These volumes serve as a starting point. The rule is formulated as follows: reduce the volume of output of all products in the same proportion until the total revenue equals the total costs. Esipova V.E. Prices and pricing: a textbook. - St. Petersburg: Peter, 2009

The Ramsey Rule can be seen as a theoretical basis for setting prices according to the value of a service. Abroad, the practice of setting freight railway tariffs in accordance with this pricing principle has long been known. In Russia, almost in accordance with this principle, in August 1995, the differentiation of tariffs for rail freight transportation by three classes of cargo was introduced.

The next method of price regulation of a natural monopoly is pricing at peak demand. This method is used when certain types of products must be consumed immediately during the production process; they cannot be stored and, therefore, stored. However, the demand for these products, as a rule, fluctuates significantly over time.

Due to the fact that the products cannot be stored, and the demand for them fluctuates over time, the production capacities of a natural monopoly are loaded unevenly. The readiness of enterprises to meet demand during periods of its peak rise is provided by the price of maintenance production capacity that are not used at other times.

The use of such pricing, in which relatively higher prices for products during periods of peak demand (eng. peak-load pricing) alternate with low prices in other periods, can reduce the attractiveness of off-peak consumption, which significantly improves the use of production capacities over time.

Let's take the power industry as an example. Pricing at peak electricity demand in Russia would mean that electricity tariffs would have to be higher in winter than in summer, and higher during the day and evening than at night. This is the case in many countries of the world. In our country, however, electricity tariffs still vary by season in inverse proportion to capacity utilization: they are lower in winter than in summer and, as a rule, do not differ by the time of day. The domestic practice of pricing is currently based on accounting, and not on economic ideas about costs.

It is clear that such pricing encourages consumers to consume electricity unevenly, which causes significant fluctuations in the utilization of production capacities and an increase in the cost of electricity.

Another method of price regulation of a natural monopoly is to set prices at the level of marginal production costs. Such prices will be low due to the nature of the marginal cost of a natural monopoly. Low prices will stimulate producers who consume electricity, gas, communications, water, etc. The well-being of individual consumers of these products will also grow at the same time. Moreover, prices at the marginal cost level mean allocative efficiency, which contributes to the normal functioning of the economy as a whole and best meets the needs of society.

An equally important method of regulation is control over the level of profitability. Establishing a maximum rate of return as compared to an unregulated natural monopoly leads to lower prices and higher sales. From the point of view of society, limiting the rate of return leads to an increase in welfare.

Rate of return regulation is considered to have a significant side effect on the investment decisions of the regulated firm. By maximizing profits in the face of a limited government-regulated return on capital, the firm seeks to replace capital resources with other inputs used. There is a so-called overinvestment. The use of more capital-intensive production methods than those that would prevail in the absence of regulation, in turn, leads to an increase in average costs above the lowest possible level. This is the Averch-Johnson effect.

Regulation of the rate of return leads to an increase in social welfare due to an increase in sales and a decrease in the price of a natural monopoly product.

However, state pricing at the level of a socially fair price would lead to an even greater increase in welfare compared to the regulation of the rate of return.

In addition to improving social welfare, the regulation of the profitability of a natural monopoly leads to a change in the proportions of resource use: the firm makes a choice in favor of a more capital-intensive method of production. Firms choose technology that does not provide efficient allocation of resources. The condition of equality of the marginal norm of technological substitution of labor by capital to the relative price of labor is not fulfilled.

Intuitively, the Averch-Johnson effect is explained by the fact that capping the rate of return increases the incentive for firms to increase output primarily through the use of capital resources, which allows, under appropriate conditions, to increase total amount profits much faster compared to the growth of the return on capital employed.

The effect of the Averch-Johnson effect is the stronger, the higher the elasticity of substitution of labor for capital for a given production function and the lower the price elasticity of demand for the firm's product. High elasticity of substitution facilitates the change in production technology, low price elasticity of demand makes it possible to shift the growing costs per unit of output to buyers of goods.

Thus, the negative consequences of monopoly power force the state to take measures to regulate the firm, even if it is a natural monopoly industry.

3. Natural monopolies in the Russian Federation

3.1 Features of natural monopolies in Russia

Natural monopolies in the Russian Federation are considered the main, basic components for the entire economy of the country. On the one hand, this is explained by the geographical remoteness of the subjects of production and use within economic complex. When viewed from a different angle, in the structure industrial production The Russian Federation is dominated by products of low degrees of processing, the costs of creating which are dominated by the costs of services of natural monopolies.

The peculiarity of Russian natural monopolies is that they are huge and vital for the functioning of the entire Russian economy. Today, 3 main natural monopolies have formed in the Russian Federation: Gazprom, RAO ES, and Russian Railways. And their mechanical division into parts in order to create competition in these industries would do more harm than good. The task of regulating these monopolies is to find a form of their functioning in which the elements of monopoly and competition are organically combined. In the meantime, the unreasonable increase in prices and tariffs in last years allows natural monopolies to increase costs without concern for increasing efficiency. Payment and settlement relations with consumers of products and services of natural monopolies have not been regulated. As a result, this area has become one of the sources of non-payments, and high prices for monopoly products limit the development potential and competitiveness of Russian industry.

Instruments for regulating natural monopolies in Russia can be conditionally divided into three groups: direct price setting for products of natural monopolies; indirect price regulation through the establishment limit values profit or profitability and the use of competitive mechanisms for the transfer of rights to produce products (render services) in a natural monopoly.

In Russian conditions, natural monopolies deserve close attention from the state, which is due to the following interrelated economic reasons.

The first reason is that natural monopolies are a more stable functioning sector of the economy. They form the basis of a country's gross domestic product (GDP). The growth or decline of this most important indicator of the financial well-being of society depends on how effectively these sectors of the economy operate. A shift for the worse in the production and economic results of these sectors of the economy can lead to a crisis in the country's economy.

The next reason is that natural monopolies in the Russian Federation are budget-forming sectors of the economy. share net profit Russian Railways currently accounts for only 6% of the total amount of taxes transferred to the budget, while, for example, in Gazprom this figure reaches 45%. http: //www.gazprom.ru/ In the context of a budget deficit, the government is interested in creating incentives to maintain the financial position of these industries in order to be able to receive regular revenues to the budget.

And another equally important reason is the imperfection of regulatory mechanisms leading to the redistribution of profitability to the benefit of natural monopolies. Due to their own monopoly power, these sectors of the economy tend to charge a higher price than a purely competitive company with the same costs would.

And the last reason is that natural monopolies are cost-generating sectors of the economy, as a result of which the level of prices and tariffs for their products and services affects the uniform level of tariffs. The inflationary potential of the economy is increasing: the rise in costs leads to a lack of investments necessary to strengthen reproduction. The need to compensate for this deficit contributes to rising prices.

Climatic severity determines the considerable "energy intensity of life" in the Russian Federation. The role of natural monopolies here is not limited to the creation of joint conditions for production and the formation of the main characteristics of financial growth: they are considered the main factor of life support, and sometimes even survival. Specifically, the data determine the scale of the country's economic activity in these sectors of the economy.

3.2 Reforming natural monopolies in the Russian Federation

The economic development of Russia requires the reform of natural monopolies, primarily in the electric power industry, gas and railway industries. Without this, it is impossible to solve the problems of attracting investments to these industries to compensate for retiring capacities and increase the supply of services during the period of increasing due to economic growth demand for them. The restructuring of natural monopolies is also the basis for reducing the costs of consumers and their services. A compromise is needed economic interests between the strengthening of the financial and economic position of these industries, which is necessary for reliable satisfaction of effective demand for their services, and the containment of the corresponding components of the costs of Russian producers. Deripaska O.V. What to be natural monopolies. / "Economy of Russia: XXI century". - 2011. - No. 11.

The task of the state is to balance the interests of all participants in the process, while ensuring the preservation of stability in the economy and sustainable growth. Reforms of natural monopolies should become integral part general strategy for the socio-economic development of the country. So far, the opposite situation is developing: the main initiators of reforms and their ideological fillers are the monopolies themselves, the struggle of interested parties over the concepts of restructuring and the content of laws is escalating, and no one has assessed the consequences of reforms for the economy. It is necessary to carry out complex analysis, which will answer, among other things, the questions of how the price dynamics of natural monopolies will affect the regional specifics of production, the financial situation of consumer enterprises and the investment processes taking place in them. Neglecting these issues will eventually lead to a slowdown in economic growth.

Reformation should be built taking into account special conditions functioning of natural monopolies in Russia, which are not repeated in any other country in the world. These conditions are associated with the large extent of the territory, which determines, on the one hand, the role of natural monopolies as economic mechanism state integration, and on the other hand, inevitably high transport costs; severe climatic conditions over most of the territory, which inevitably leads to a higher energy intensity of the economy.

Also, the strategic importance of the products of natural monopolies for national security, geopolitical influence and ensuring the export potential of the country and the historical location of enterprises (including large ones), economically determined by the distribution of industrial production with a focus on energy sources.

Therefore, the approach to reforms must be strictly balanced, based on accurate calculations. The direct transfer of any foreign model to Russian soil is simply unacceptable. Moreover, the technological features of each of the branches of natural monopolies require a special approach. It is obvious that the natural monopoly and potentially competitive activities in each of them should be separated as far as it is reasonable in the existing conditions.

The state policy in this area will be aimed at solving the following tasks: restructuring of these industries to clearly distinguish between natural monopoly and potentially competitive types and potentially competitive types of economic activity, strengthening state control in the first case, and stimulation of competition - in the second, increasing the transparency of the cost structure; full organizational and financial transparency of the activities of enterprises in these industries; equalization of conditions of taxation of producers and consumers different types fuel, as well as various transport services.

Also, ensuring non-discriminatory access of independent producers and consumers to the services of natural monopolies with effective antimonopoly regulation and the cessation of cross-subsidization of various categories of consumers.

Conclusion

The problem of regulation of natural monopolies has always had a special place. Maintaining a balance between the interests of the population and monopolists is a rather difficult task. In order to achieve the desired result, it is necessary to determine tariffs in the most efficient and objective way, taking into account the interests of both parties. And it will also be necessary to stimulate natural monopoly firms to reduce production costs and improve the quality of service. To implement all these tasks, regulatory bodies for natural monopolies have been created. Before making any decision to change regulation, regulators conduct a thorough analysis of the sector of the economy, taking into account all the required aspects of their activities.

In terms of their economic, technical and organizational characteristics, the Russian natural monopolies RAO "UES of Russia", OAO "Gazprom" are at the level of the best world standards, and surpass them in some indicators. These economic structures, with a reasonable attitude towards them, can not only pull our economy out of today's breakthrough, but also allow it to take over in the 21st century. one of the leading places in the world. Natural monopolies should be regarded as our national monopoly, which in many respects has no analogues in the world.

For the formation of the economy, it is necessary to regulate the activities of natural monopolies, but directly regulation, but not division. Natural monopolies have every chance not only to organically fit into the economy of the region, but also to raise its level to extraordinary heights.

The priority task of the government should be the regulation of already existing natural monopolies. Taking into account the special role for the life of society of the sectors of the economy related to natural monopolies, their state regulation (especially in conditions of systemic economic crisis) must be oriented, to begin with, to stop or contain the rise in the price of products (services) of a natural monopoly on domestic market while maintaining these tariffs (tariffs) at a level sufficient for expanded reproduction. With the correct policy of the country, one can count on the subsequent prosperity of both monopoly entities, but also residents of the country.

List of used literature

1. http://www.gazprom.ru/ - website of OAO Gazprom.

2. Akulov V.B., Rudakov M.N. Theory of organization: textbook. allowance. - Petrozavodsk: PetrGu, 2012.

3. Galperin V.M., Ignatiev S.M., Morgunov V.I. Microeconomics v.2: textbook - St. Petersburg: "Economic school", 2009.

4. Gorbukhov V.A. Commercial law. Cribs: textbook. allowance. - M.: Eksmo, 2013.

5. Gryaznova A.G., N.N. Duma Economic theory. Express course: textbook. allowance - M.: Knorus, 2010.

6. Deripaska O.V. What to be natural monopolies. / "Economy of Russia: XXI century". - 2011. - No. 11.

7. Esipova V.E. Prices and pricing: a textbook. - St. Petersburg: Peter, 2009

8. Zhuravleva G.P. Economic theory. Microeconomics-1,2: textbook - M.: "Dashkov and co", 2010.

9. Kostenko M.A. Commercial law: textbook. allowance. - Taganrog: TTI SFU, 2010.

10. Levkina E.V. Microeconomics: textbook. - M.: Eksmo, 2011

11. Meteleva Yu.A. Legal regulation pricing in the sphere of natural monopolies. / Journal of Russian law. - 2013. - No. 10.

12. Nosova S.S. Fundamentals of Economics: textbook. - M.: Knorus, 2012.

13. Pikulkin A.V. System of public administration: textbook. - M.: Unity, 2010.

14. Raizberg B.A. Public administration economic and social processes: textbook. allowance. - Rostov n / a.: Phoenix, 2010.

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Art. 9 federal law dated August 17, 1995 N 147-FZ "On Natural" establishes that the regulatory bodies of natural monopolies are formed in the areas of activity specified in Art. 4 of this Federal Law.

In accordance with the Decree of the Government of the Russian Federation of June 30, 2004 N 332 federal Service by tariffs is federal agency on the regulation of natural monopolies, performing the functions of determining (setting) prices (tariffs) and exercising control on issues related to the determination (setting) and application of prices (tariffs) in the areas of activity of subjects of natural monopolies.

In accordance with Decree of the Government of the Russian Federation of June 30, 2004 N 331, the Federal Antimonopoly Service is an authorized federal executive body that performs the functions of adopting, controlling and supervising compliance with competition law on commodity markets, protect market competition financial services, activities of subjects of natural monopolies (in terms of the powers of the antimonopoly body established by law).

Functions of the regulatory bodies of natural monopolies (Article 10 of the Federal Law):
    • form and maintain a register of subjects of natural monopolies;
    • determine the methods of regulation;
    • control, within their competence, compliance with the requirements of this Federal Law;
    • submit, in accordance with the established procedure, proposals for improving the legislation on natural monopolies;
    • take decisions on all issues related to the introduction, change or termination of regulation of the activities of subjects of natural monopolies, as well as the application of the methods of regulation provided for by this Federal Law.
The powers of the regulatory bodies of natural monopolies (Article 11 of the Federal Law):

The regulatory bodies of natural monopolies have the right to:

    1. make decisions binding on subjects of natural monopolies on the introduction, amendment or termination of regulation, on the application of the methods of regulation provided for by this Federal Law, including the establishment of prices (tariffs);
    2. establish rules for applying prices (tariffs) for goods (works, services) of subjects of natural monopolies;
    3. take, in accordance with its competence, binding decisions on the facts of violation of this Federal Law;
    4. send to subjects of natural monopolies binding instructions to stop violations of this Federal Law, including the elimination of their consequences, to conclude contracts with consumers subject to mandatory service, to amend the concluded contracts, to transfer to federal budget profit received by them as a result of actions violating this Federal Law;
    5. make decisions on inclusion in the register of subjects of natural monopolies or on exclusion from it;
    6. send binding orders to executive authorities and local self-government bodies to cancel or change acts adopted by them that do not comply with this Federal Law, and (or) to stop violations of this Federal Law;
    7. apply to the court with a claim, as well as participate in the consideration of cases in court associated with the application or violation of this Federal Law;
    8. exercise other powers established by federal laws.

The subjects of natural monopolies, their consumers engaged in entrepreneurial and other economic activities, or the executive authorities of the constituent entities of the Russian Federation specified in Clause 3 of Article 5 of this Federal Law, have the right to apply to the natural monopoly regulatory body for pre-trial settlement of disputes related to the establishment and application of prices (tariffs) regulated in accordance with this Federal Law.

Methods for regulating the activities of subjects of natural monopolies

Art. 6. Federal Law No. 147-FZ of August 17, 1995 "On Natural Monopolies" defines the following methods for regulating the activities of subjects of natural monopolies (hereinafter referred to as regulation methods):

    • price regulation, carried out by determining (establishing) prices (tariffs) or their maximum level;
    • determination of consumers subject to mandatory service, and (or)
    • establishing a minimum level of their provision in case of impossibility to meet in full the needs for goods produced (sold) by the subject of natural monopoly, taking into account the need to protect the rights and legitimate interests, ensure the security of the state, protect nature and cultural values.

The list of goods (works, services) of subjects of natural monopolies, the prices (tariffs) for which are regulated by the state, and the procedure for state regulation of prices (tariffs) for these goods (works, services), including the basics of pricing and the rules of state regulation, are approved by the Government of the Russian Federation.

State regulation of prices (tariffs) for goods (works, services) of subjects of natural monopolies in the field of water supply and sanitation using centralized systems, communal infrastructure systems is carried out in accordance with federal laws.