❖ Tenaga Nasional Berhad (TNB) is the largest electricity utility company in Malaysia. TNB was formed in 1990 by the Electricity Supply Successor Company Act 1990.
❖ TNB is the only energy company in Malaysia. TNB supplies electric to buildings, factories, houses, schools, and many more. It shown that TNB is the monopoly because only they supplies electricity to whole over Malaysia.
❖ There are no close substitutes companies that also in the electricity market. They do not face any competition because there are no other companies exist.
❖ TNB is a price marker,since there is only them supplies electricity. It has power to control the price in the market. They control the price and total supply.
❖ TNB do not need any advertising because all the Malaysian knows only TNB supplies electricity.
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❖ Short run is a time period which there are fixed and variable factors. Short run equilibrium for TNB
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MC = Marginal Cost
AC = Average Cost
MR = Marginal Revenue
AR = Average Revenue
DD = Demand
❖ TNB makes profit when AC is below AR.
❖ Calculation :
TR = 0A x 0M
TC = 0B x 0M
Profit = TR – TC
= ABCD
❖ Long run is the time which TNB can adjust its input used in production. All the factors are variable. TNB will earn supernormal profits.
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❖ Malaysia Government gave exclusive rights to TNB produce and supplies electricity to whole over Malaysia.
❖ In Monopoly market, there will be strict barriers to the entry of new firm.
❖ Only TNB providing electricity in one area and not two or more companies providing this electric service.
❖ It will not make sense to have more electricity companies...