Question

By observing the market in the Malaysian economy:

a. Do you think the Malaysian economy has many monopolies? If yes, provide examples and justify your answer.
b. Do you think the food items trade in Malaysia faces significant competition, and if so, how does this competition impact consumers and the industry?

Answer 1

The Malaysian economy has instances of monopolies in industries such as telecommunications and utilities. Food items trade in Malaysia faces significant competition, which benefits consumers by providing more options and keeping prices competitive.

Step-by-step explanation:

Monopoly refers to a market structure where there is only one seller or producer of a product or service, giving them significant control over the market. There are three possible types of monopolies:

1. Natural Monopoly: This type of monopoly occurs when a single firm can supply a good or service at a lower cost than multiple firms due to economies of scale, such as in the case of water or electricity utilities.
2. Geographic Monopoly: This type of monopoly occurs when a firm has exclusive control over a certain geographic area, preventing other firms from entering the market. For example, a local cable TV provider may have a geographic monopoly in a specific town or city.
3. Legal Monopoly: This type of monopoly occurs when the government grants exclusive rights to a single firm to produce a certain good or service. Examples include patents and copyrights, which protect intellectual property rights and prevent others from producing the same product or service.

In the Malaysian economy, there are instances of monopolies, particularly in industries where there are significant barriers to entry, such as telecommunications and utilities. For example, Telekom Malaysia Berhad (TM) is the country's largest telecommunications provider and has dominant control over the market. This lack of competition can limit consumer choice and potentially lead to higher prices. In regards to the food items trade in Malaysia, it likely faces significant competition due to the presence of numerous restaurants, grocery stores, and micro businesses in the market. This competition is beneficial for consumers as it provides them with a wider range of options and helps keep prices competitive. The industry itself is also pushed to innovate and improve efficiency in order to stay competitive in the market.