Theory of Monopoly Competition, a current bourgeois theory dealing with problems of marketing under the competition of monopolies. It made its appearance in the 1930s. Founded by the American bourgeois economist E. H. Chamberlin, it was further developed by bourgeois scholars belonging to different trends of political economy. The concepts comprising this theory are based on recognition of the real fact of the linkage on the capitalist market between monopoly and competition. But this system does not at all embrace a scientific understanding of the essence of monopoly capitalism, because it isolates monopoly from the concentration of production which, as Lenin pointed out, proceeds at a certain level of development right up to the monopoly. According to the theory of monopoly competition, the essence of the monopoly is not domination of the decisive sphere of production or marketing of the given industry, but control over the differentiated product (i. e., the product differing from other products by even certain insignificant characteristics, such as colour, etc.), effected by the big and small merchants down to salesmen in small boutiques, as well as street hawkers. Thus, the theory of monopoly competition distorts the essence of the monopolies and contradicts Lenin’s theory of monopoly capitalism. According to it, competition arises when the market is divided between the owners of the substitutes of differentiated goods. Monopolies and competition combine when the " differentiation of goods" is followed by the appearance of substitutes. True, there is competition of this kind on the capitalist market, but it is not the sole kind of competition, moreover, the competition of substitutes assumes a monopoly character only when these products are manufactured by the trusts, cartels, syndicates, etc. The problems of market relations and the production of competing monopolies in the period of mass production of specialised goods is the main subject of the theory. The analysis is made on the basis of an individual company striving to make the highest profit. Using the theories of factors of production and marginal productivity (see Theory of Factors of Production and Theory of Marginal Utility), those of this school claim that the objective intra-industry differentiation of products of various firms could account for the relative independence of individual prices in relation to the market price, i. e., yield a certain " monopoly effect”. Thus, surface market processes of the formation of prices and profits are regarded as the processes which create value and profits. This vulgar absolutisation of the sphere of circulation conceals the main source of monopoly profit— surplus value. The purpose of the theory of monopoly competition is to ease the most acute contradictions of state- monopoly capitalism.