Question 2

Market structures play a crucial role in shaping the behavior of firms, the allocation of resources, and the welfare of consumers. Among these structures, the concept of a monopoly stands out as a paradigm of market dominance and concentration of economic power. In a monopoly market, a single firm or entity holds exclusive control over the production and distribution of a particular product or service, thereby exerting significant influence over prices, output levels, and market dynamics. The implications of monopoly power extend beyond mere economic considerations, affecting factors such as innovation, consumer choice, income distribution, and regulatory policies. Understanding the intricacies of monopoly markets is essential for policymakers, regulators, businesses, and consumers alike, as they navigate the complexities of market competition, efficiency, and equity in economies such as Malaysia.

Required:

1. Critically evaluate THREE (3) implications of monopoly markets on consumer welfare in Malaysia. (3 Marks)

1. Critically evaluate THREE (3) implications of monopoly markets on innovation incentives in Malaysia. (3 Marks)

1. Critically evaluate FOUR (4) roles of government intervention in regulating natural monopolies and public utilities in Malaysia, such as electricity, water, and telecommunications. (4 Marks)

(Total: 10 Marks)