Economic outcomes and evaluation of market power of enterprises

Equitable distribution of society's resources is impossible without controlling monopolies. This is especially true of state-owned enterprises, which, in addition to inflated prices, often have the ability to use the resources received inefficiently. In order to control the market power of enterprises, scientists have already developed many approaches to analysing the market structure and assessing the level of its concentration. At the same time, the problem of formal numerical assessment of the degree of market power of enterprises remains insufficiently resolved. One of the most important areas of assessing the market power of an enterprise is the analysis of its economic results. The essence of this assumption is quite simple: the higher the level of market power an enterprise has, the more independent it is in setting higher prices, which lead to excessive profits. This paper does not consider possible sources and causes of market power related to product uniqueness, cross elasticity of demand or market structure. The purpose of the paper is to find a way to assess market power according to performance indicators that are derived from and result from the use of market power by an enterprise. However, a study of the existing methods of assessing the level of market power of an enterprise has shown that there is no single approach to determining the degree of market power of an enterprise, despite the unambiguous dependence. Most methods propose to use profitability as a basis, but there is a variety of views on how to calculate this indicator. While the first component of profit, revenue or the price of goods, is a fairly objective indicator, the greatest difficulties are found in understanding and applying cost elements to calculate profitability as a measure of market power.