Importance Of Monopoly In Economics
0.0 Introduction
Economic monopoly caused by market access restrictions, mainly for the exclusive access to market opportunities, once the economic monopoly, the opportunity to enter this the market by new investment is difficulty. The principal of economic monopolies are not share the opportunity to enter the market with others, but also do not share new market opportunities with other undertakings.
1.0 Monopoly in the context of Economics
Monopoly is a market structure where only one firm only exists in it to producing a specific goods and services to consumer. They are referred to as the monopolist. They control the whole market share, as they do not have any competition and has ability to control the production and pricing. However, in
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But he cannot control demand for the product, as there are many buyers.
• No close Substitutes:
There are any close substitutes for the product. The buyers have no alternatives or choice. Either they have to buy the product or go without it.
• Price Discrimination and price maker :
The monopolist has control over the supply so as to increase the price. Sometimes he may adopt price discrimination. He may fix different prices for different sets of consumers. A monopolist can either fix the price or quantity of output; but he cannot do both, at the same time.
• No Entry or high barriers:
There is any freedom to other producers to enter the market as the monopolist is enjoying monopoly power. There are strong barriers for new firms to enter. There are legal, technological, economic and natural obstacles, which may block the entry of new producers.
• Firm and Industry:
Under monopoly, there is no difference between a firm and an industry. As there is only one firm, that single firm constitutes the whole industry.
2.0 The Monopolies in Malaysia
Most of commodity & utility products are monopoly or some are oligopoly in Malaysia, example as
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Example for, Penang State are monopoly by PBA (Perbadanan Bekalan Air Pulau Pinang Berhad), Kedah State are monopoly by SADA (Syarikat Air Darul Alam Sdn Bhd), Selangor state are monopoly by Syabas (Syarikat Bekalan Air Selangor Sdn Bhd) and so on.
2.3 Casino Industry
As we all know Casino Industry has been the fastest growing service sector in the world. In Malaysia, Genting Highland is where the famous and largest Casino Industry was started and its called Casino de Genting. They only one have casino licence by government of Malaysia, so that there are monopoly market structures. Today, Casino de Genting is one of the finest gaming destinations in Asia .
2.4 Telecommunication Industry
Telekom Malaysia Berhad is the largest telecommunication company in Malaysia. It has a monopoly on the fixed line network and TM Net is now the sole DSL broadband provider in the
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