Natural Monopoly and its Regulation - Курсовая работа

Bukhara state university The Department of Economics The Ministry of Higher and Secondary Special Education of the Republic of Uzbekistan Course work On subject Microeconomics ” Theme: Natural Monopoly and it’s Regulation Done by: Social-Economical Faculty, 2 G (3-3IQT12) Group Mirshod Narzullaev Student Supervisor: Adizov B. Bukhara 2014 Contents Introduction Chapter I. Theoretical aspects of Natural Monopoly and it’s regulation 1.1 The essence of Natural Monopoly 1.2 The necessity of regulation over Natural Monopoly 1.3 Methods of state regulation over the Natural Monopolies Chapter II. Analysis and Uzbek practice of regulation over Monopolies 2.1.Competition Legislation and Institutions 2.2 Natural Monopolies in modern Economy of Uzbekistan Conclusion The list of used literature Аннотация Introduction The concept of natural monopoly presents a challenging public policy dilemma. On the one hand a natural monopoly implies that efficiency in production would be better served if a single firm supplies the entire market. On the other hand, in the absence of any competition the monopoly holder will be tempted to exploit his natural monopoly power in order to maximize its profits. This course work will take a closer look at the model of natural monopoly. It will address those areas where an unregulated natural monopoly is generally considered to be the cause of concern, before offering a brief overview of the regulatory process and some of its specific regulatory tools. It should be noted that this work mainly aims to provide an introduction to the vast literature on this topic, which has fascinated many economic and legal scholars over the years. The aim of this work - learning Natural Monopoly and it’s regulation. In order to achieve the aim following tasks need to be solved: · To learn the essence and influence to the effectiveness of natural monopoly; · To find out the methods of state regulation over natural monopolies; · To analise natural monopolies in modern Uzbekistan; · To observe state regulation over natural monopolies in the Republic of Uzbekistan The objectives and tasks of this work define its structure. The work consists of Introduction, 2 chapters, Conclusion and the list of used Literature. Actually, the following issue is one the most controversial issues in Economy of Uzbekistan, because in order to achieve new circuits of economic development it is necessary to take into consideration particular qualities and problems based on all spheres of Production and particularly the infrastructure. The reformation of natural monopolies has become more urgent for the last few years. Specialists are searching for the ways of solving tasks based on tariff of goods and services in natural monopolies, and other tasks as well. More effective regulation methods are processing and alternative ways of attraction of investments are also elaborating. In the following course work periodical stamp materials and normative law acts are used. In Literature this topic is worked up enough good. Chapter I. Theoretical aspects of Natural Monopoly and it’s regulation 1.1 The essence of Natural Monopoly A monopoly is a firm which is the only one producing and selling a particular product. A natural monopoly is a monopoly in an industry in which it is most efficient (involving the lowest long-run average cost) for production to be concentrated in a single firm. This market situation gives the largest supplier in an industry, often the first supplier in a market, an overwhelming cost advantage over other actual and potential competitors, so a natural monopoly situation generally leads to an actual monopoly. This tends to be the case in industries where capital costs predominate, creating economies of scale that are large in relation to the size of the market, and hence creating high barriers to entry; examples include public utilities such as water services and electricity. While in other situations a monopoly can lead to restricted output, higher than necessary prices, and production that is inefficient (at higher average cost) than would occur with many producers, a firm that is a natural monopoly produces at lower average cost than would be possible with multiple firms. natural monopoly economy uzbekistan All industries have costs associated with entering them. Often, a large portion of these costs is required for investment. Larger industries, like utilities, require enormous initial investment. This barrier to entry reduces the number of possible entrants into the industry regardless of the earning of the corporations within. Natural monopolies arise where the largest supplier in an industry, often the first supplier in a market, has an overwhelming cost advantage over other actual or potential competitors; this tends to be the case in industries where fixed costs predominate, creating economies of scale that are large in relation to the size of the market, as is the case in water and electricity services. The cost of