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Assignment Economy

1) The main characteristics that determine a market structure are the number and size of buyers and sellers in the market, as well as whether there is a monopoly or oligopoly. 2) A monopoly exists when there is a single seller producing a product without close substitutes, and other firms are restricted from entering the market. Examples of monopolies in Malaysia include Tenaga Nasional Berhad (TNB), Telekom Malaysia, and Jabatan Bekalan Air (JBA). 3) YTL cement has characteristics of a monopoly as the sole provider of cement in Malaysia, with no close substitutes and the ability to control prices without competition.

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HUDA SYAZWANI MOHAMAD HUZAINI
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181 views2 pages

Assignment Economy

1) The main characteristics that determine a market structure are the number and size of buyers and sellers in the market, as well as whether there is a monopoly or oligopoly. 2) A monopoly exists when there is a single seller producing a product without close substitutes, and other firms are restricted from entering the market. Examples of monopolies in Malaysia include Tenaga Nasional Berhad (TNB), Telekom Malaysia, and Jabatan Bekalan Air (JBA). 3) YTL cement has characteristics of a monopoly as the sole provider of cement in Malaysia, with no close substitutes and the ability to control prices without competition.

Uploaded by

HUDA SYAZWANI MOHAMAD HUZAINI
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

MARKET STRUCTURE CHARACTERISTIC

The main characteristic that determine a market structure are the number and distribution
size of buyers and sellers in the market for particular goods and services. The characteristic
of market structure also involve monopoly and oligopoly.

MONOPOLY
The meaning of monopoly is existance of a single sellers in the market producing a product
that has no substitute. In this market structure, the entry of other firms is restricted. Tenaga
Nasional Berhad (TNB), Telekom Malaysia and Jabatan Bekalan Air (JBA) are examples of
monopoly in Malaysia.
CHARACTERISTICS
1. ONE SELLER AND A LARGE NUMBER OF BUYERS
- The monopolistic market exist when a single company in the dominant provider of a
good and service to many consumers. Generally monopolistic markets consist of only
one seller controlling the production of a good or service. The monopolist is both a
company and an industry.
- YTL cement is the only one seller of cements in Malaysia. This is because YTL cement
is a leading regional building materials group in Asia contributing to constructing
homes, buildings and infrastructure for more than 60 years.
2. PROUCT HAS NO CLOSE SUBSTITUTES
- There are no substitutes for the goods or services because there is only one provider
and enterprises cannot simply enter or exit. Because there are no other identical
goods or services, a monopoly also has absolute product differentiation. If there are
any substitutes, the monopolist cannot charge whatever price he or she wants or act
as the price maker.
- YTL cement does not have any competition or any substitute product which is
cements with other company.
3. PRICE MAKER
- As there is only one seller or producer and it has the power to control the market
price, the monopolist is the ideal price maker. The price maker is a monopoly that
sets the price and supply of an item or service. A monopoly is a profit maximizer
because it can increase earnings by adjusting the supply and price of the good or
service it supplies.
- YTL cement has the power to control the price of cements in the market. For
instance, the current market price of the cements is RM19.50 per 50kg.
4. RESTRICTION ON THE ENTRY OF NEW FIRMS
- In a monopoly market, typically there are high barriers to entry, or restrictions that
prohibit other companies from joining the market. Potential market entrants are at a
disadvantage because the monopoly has a first-mover advantage, which allows it to
undercut a potential newcomer and prevent them from obtaining market share by
lowering prices.
- There are high barries to the entry of new firms into the production of cements such
as financial barrier.
5. ADVERTISING
- In a monopoly market, advertising is determined by the products sold. If the
products are high-end items, such as imported automobiles, the monopoly will
require some advertising to alert consumers about the products. Local public
services such as water and electricity do not require monopolist advertising because
the consumer already knows where to get them.
- YTL cement does not need the advertistment since the consumers know where to
obtain the cements product.

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