It is reported that the Malaysian government has finally broken the monopoly on sugar import

in the country. As a result, food and beverage (F&B) manufacturers in the country could now

import refined sugar directly at a price of less than RM2 per kg, compared to previously where these manufacturers have to buy refined sugar at RM2.80 per kg from a single or two companies in Malaysia that are allowed to import raw sugar and refine it in the country. To this end, the government feels that monopoly is bad for the country's economy and hence, it would take actions against any business that is being monopolized by certain individuals or firms.

a) Based on the extract above, justify TWO (2) characteristics that exhibit sugar import as a

monopoly. (10 marks)

b) Critically evaluate THREE (3) economic rationales behind that the Malaysian government

is against any firms monopolizing the market. (20 marks)