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Background Of Company: Telekom

Introduction

In financial field, there are various kinds of market structure. The normal market structures that we all knew are perfect competition, monopoly, monopolistic and also oligopoly.

In this project, we will put main concern on monopoly and perfect competition. As most of us realized that, monopoly is a predicament where there is one seller which the organization is the industry and many customers on the market whereas monopolistic is a kind of market structure where a large number of businesses produce close but not perfect alternative product.

In this assignment, our group has chosen Telekom Malaysia as the example of company that procedures monopoly framework. Throughout this group assignment, we were able to found a great deal of information about Telekom Malaysia. The information are shown below :

Background of Company (Telekom)

Telekom Malaysia BHD (TM) is the first telecommunication monopoly company in the country that still remains top telecom group and a fast-growing international player in the Asian region. The business continues to control the fixed-line telecom market with more than 4. 6 million access lines.

In addition to the fixed-line business, TM is one Malaysia's leading cellular telephone supplier and leading Internet provider, TMNet, which is also the only real broadband company in the country. In addition to their procedure in Malaysia, TM has developed a network subsidiaries and investments internationally with the give attention to Asian region. In 2005, the company is detailed on the Kuala Lumpur STOCK MARKET.

Characteristic

In monopoly, there a wide range of characteristic. Among the characteristic is that we now have no competition between your companies as it is only seller in the market. Telekom Malaysia is the largest telecommunication company in Malaysia. It has a monopoly on the fixed collection network.

Besides that, there a wide range of buyers on the market. Since Telekom Malaysia was build, many citizens in Malaysia started to use their services. It also has a significant market share of the mobile communications market after acquisition of Celcom and TM Touch. Not only have that, Telekom Malaysia right now also offered narrowband and broadband connection which is now the DSL broadband supplier in the industry.

Thirdly, the feature of monopoly is that the firm enjoys abnormal earnings. Because there are no other competitors, the firm has the capacity to monopolies the price tag on their goods and services. In this matter, the buyer haven't any other choice, so they'll either choose or leave the product.

The last characteristic of monopoly is obstacles to entry which the firm will reduce the ability of new organizations to enter the market and remain competitive.

Advantages and Disadvantages between Monopoly and Perfect Competition

There are some benefits and drawbacks of monopoly. Firstly, the advantage is monopoly has only one firm and the marketplace is the price maker. Hence, the price tag on the goods and services will be secure. Secondly, because of the absence of the competition, monopoly company can have the maximum profits of their sales.

On the other hand, the first disadvantage is a high price of a low quality good and service may be priced on the buyer. Secondly, because of no competition may lead to poor and outdated good and service.

There are also some advantages and disadvantages of perfect competition. The first benefit is due to the presence of your competition, consumers can get a lesser price of the goods and services. It is because all the companies produce similar products and the organizations are price taker. Second of all, in the perfect competition, the businesses must contend to one another to increase their sales. As a result of this situation, it will encourage each firm's efficiency and it will also encourage faster financial growth.

However, perfect competition has drawbacks too. First of all, unequally of the circulation of the products and services due to allocation of resources depends upon the circulation of income. Subsequently, externalities are dismissed. For example, when there are external benefits, too little goods are produced so when there are external costs, too much goods are produced.

Comparison between Monopoly and Perfect Competition

In the perfect competition, there are a huge number of clients and sellers on the market competing with each other. The price fixed by the industry is accepted by all the companies operating in the market. Within the monopoly, there is only one single seller but a large number of clients. Hence, the firms are price manufacturer and they all decide the prices.

Besides that, a correctly competitive company makes only normal income in the long run. It is because there is liberty of access and exit. But under monopoly, the organization continues earning revenue even over time since there are strong obstacles to the entry of new companies in the monopolistic industry.

Conclusion

In a nutshell, throughout this assignment, we are able to find out more on monopoly and monopolistic market structure. Apart from that, our group users and I also learnt that people have to work together effectively and successfully to make certain our task have finished well.

Although we confronted some difficulties and problems when doing this assignment, but we still make through it with everyone's cooperation. Besides that, we've also learnt about the specialty of monopoly and monopolistic market framework in economics view.

Therefore, we can apply it during school as we've already learnt deeper to them. Finally, economics is important since it can be used in our lifestyle no subject for today's or in the future.

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