TNB IS A Monopoly?

A monopoly is an industry with a single firm that produces a product for which there are no close substitutes. No other firms are allowed or able to enter the market due to barriers of entry. For example, Tenaga Nasional Berhad (TNB) is the largest Electric utility company in Malaysia and also the largest power company in Southeast Asia with MYR 69.8 billion worth of assets. It is a monopoly company. TNB's core activities are in the generation, transmission and distribution of electricity.

          A government directive is also part of barriers to entry a certain industry, but for monopoly the government has set it is as a consequence of imposition of regulation that makes entry of new firms unattractive or almost impossible. Monopoly is inefficient because price exceeds marginal cost so marginal benefit exceeds marginal cost. On all output levels for which marginal benefit exceeds marginal cost, a dead weight loss is incurred. This causes inefficiency in social welfare in which maximum surplus cannot be achieved.

By = Yap Kuan Wei