THE IMPACT OF BPR ON INCREASING THE EFFECTS OF AD VALOREM TAXES AND THE ROLE OF THE BUSINESS PLAN IN MAINTAINING MONOPOLY EQUILIBRIUM AND MARKET POWER

Abstract

Business Process Reengineering (BPR) in monopolistic enterprises aims to increase efficiency and reduce costs by integrating processes in order to achieve optimal performance. The business plan in monopolistic companies relies, among other things, on cost optimization and price control in competitive conditions. Monopoly and perfect competition represent two extreme market structures. A perfectly competitive market is characterized by the presence of numerous firms producing a homogeneous product, with no barriers to entry for new firms into the industry. In a monopolistic market, there is only one producer offering a differentiated product with no close substitutes, and where barriers to entry are very high. Like firms in other market structures, a monopolistic firm seeks to maximize its total profit. The position of maximum profit is achieved at the level of output where marginal costs equal marginal revenue. This corresponds to a level at which price is higher than marginal cost, which is the source of its monopoly power. Economic theory has devoted considerable attention to the study of monopoly power and measures for its mitigation. The subject of this paper is the specific impact of BPR on increasing the effects of ad valorem taxation as one of the forms of regulating monopolistic firm behaviour, as well as the effects of its implementation, which ultimately result in equilibrium in the monopolistic market.