Abstract:This paper uses theory of microeconomics analysis to explore the problem whether trade can break monopoly and promote competitiveness.With analysis of monopoly price determination principle and the concept of Lerner index,it concludes that the price elasticity of demand is the key to the way trade could affect monopoly.Under the ideal situation,the introduction of trade can indeed break the monopoly,and push the market into an efficient system.But from the view of forming monopoly,by barriers of entry,trade cannot help.On the opposite side of this coin,trade would reinforce the power of monopoly.Finally,three suggestions are proposed according to the conclusions,i.e.,1) the domestic market structure should be accounted in decision-making for trade policies,2) it would be helpful of increasing variety of goods to counteract trade monopoly,and 3) the trade theories should be given enough attention to.