We shall see in the relevant chapter that, from the point of view of the Union's industrial and enterprise policies, concentrations of small and medium-sized undertakings into larger units are in principle desirable and should be encouraged, as they lead to economies of scale, the rationalisation of the production and distribution of products in the common market and promote technical progress [see section 17.2.1]. But if the concentration exceeds certain limits, which vary from sector to sector, it may result in the formation of monopolies or, more often, oligopolies and the consequent restrictions of competition and intra-European trade. This occurs in particular where an undertaking, which dominates a sector by virtue of its size and economic strength, acquires the smaller undertakings in competition with it one by one.