firm to provide all of the market's output. Governments often restrict monopolies through high taxes or anti-monopoly laws. Because the high profits obtained by monopolies may harm the interests of consumers. However, restricting the profits of monopolists may also harm the interests of consumers, because companies may create unsatisfied products that are not available in new markets. These products will bring positive benefits to consumers and create huge economic value for enterprises. Tax and antitrust laws can discourage companies from innovating. Intensity of price competition The intensity of price competition is another good measure of how much control a firm within a market structure has over price. The Herfindahl Index provides a measure of firm concentration within a market and is the sum of the squared market shares of all the firms in the market (Herfindahl Index = (Si)2, where Si = market share of firm i) . Large companies are given more weight in the index (unlike the N-concentration ratio). The value of the index ranges from 1/N to 1 (where N is the number of firms in the market). Thus, the more concentrated the market is, the larger the value of the Herfindahl Index will be. The table below provides an overview of price competition and intensity in the four main classes of market structure. See also Perfect competition Monopolistic competition Oligopoly Monopoly Monopsony Oligopsony Duopoly References Massimiliano Vatiero (2009), "An Institutionalist Explanation of Market Dominances". World Competition. Law and Economics Review, 32(2):221-6.