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According to Stiglitz (1987) to the invisible hand operation is required to compete. The failure to compete with many causes, but the cause is said to be heavy and most recognizable of which is the existence of various forms of monopoly in the economy. For example, the presence of trade monopoly localized in the supply of consumer goods to rural areas or in the purchase of products by farmers.
In the proprietary format, a proprietary format used to encountered in the production of animal products that are natural monopolies, natural monopolies, but its expression is the marginal cost of production decreases with the size of production, which causes related factors like geographic regions, local policy or other natural factors. Obviously, when performing any proprietary expression also lead to failures in competition and this brings about the welfare losses caused by the allocation of resources inefficient way.
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