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Meaning / Definition of

Franchised Monopoly

Categories: Business and Management,

A government-granted monopoly. The most important reason for the government granting a monopoly is in the case of the product or service being a natural monopoly, i.e. unable to sustain more than one producer. This is usually the case when very large economy of scale is needed to make production efficient (so the marginal cost of producing each additional unit is very low). Thus, given the huge scale of production needed for efficiency, it could be that the entire market demand would be fulfilled by a single efficient producer, making it unfeasible to have a second producer in the market. Thus, the government may decide to simply give a producer a monopoly, so that the producer is convinced of the fact that there is adequate market to achieve efficient scale. A government may also choose to grant monopolies in special conditions such as when they want to encourage a specific kinds of innovation (patents are effectively a government-granted monopoly), give preference to a producer who might also be involved in community development activities etc.

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Definition / Meaning of

Budapest Stock Exchange (BSE)

Categories: Stocks, Investing and Trading,

financial institution in Budapest, Hungary, whose "main goal is to become the financial centre and primary trading venue of Hungarian securities, and to successfully take part in the competition for issuers." Its four main activities are (1) listing services, (2) trading services, (3) dissemination of market information, and (4) product development.Four years after originally opening as the Hungarian stock exchange on January 18, 1864, in Pest, the exchange gained the Grain Hall and became the Budapest Stock and commodity exchange (BSCE). The government dissolved the BSCE after World War II, claiming its assets as state property. The BSE reopened on June 21, 1990, with forty-one members and one equity, IBUSZ, the budapest stock exchange. From 1990 until 1995, physical trading on the floor had partial electronic support. In 1995, trading on the floor and in a remote trading system became concurrent and stayed that way until November, 1998 when the MultiMarket Trading System (MMTS), which relied completely on remote trading, was put in place. By September, 1999, physical trading on the floor ceased. The BSE has been a subsidiary of the CEESEG AG holding company since January 2010.

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