1.

0 Introduction of Monopoly

A word monopoly derives from the Greek word monos which means alone or
single and the words polein which means to sell. Monopoly exists when there is
one party who controls the supply of a goods and services. The words of monopoly
has many uses like for the board game also called monopoly but in the form of games
where there is for two to six players who throw die to get their tokens and to acquire
the property such as lands, building and etc.

Usually, the words monopoly in economics terms is to show or to aim to the

corporate monopoly. Therefore, the textbook Principles Of Economics written by
Deviga Vengedasalam and Karunagaran Madhavan gives definition for monopoly is
the existence of single seller in the market producing a product that has no substitutes.
From the definition given, monopoly is an exclusive control by one group of the
market supply where they are controlling the whole market share, as they do not have
any competition and they can make possible to manipulate the prices in the market.
The group we can refers as a big company or a group of people who has such power
to control the market in which they can obtain many buyers but only one seller in the
market. They are referred to as the monopolist. However, in reality, pure monopoly
does not exist because there will be some form of competition from other forms. For
example, post office such as Pos Laju is a monopoly, but there is competition from
courier companies etc.

In our assignment project, after we have analyzed about monopoly in Malaysia,

we decided to take an example about the Tenaga Nasional Berhad (TNB) who is the
main sector supplies electricity throughout Malaysia. Set up as the Central Electricity
Board of the Federation of Malaya in 1949, TNB has powered national development
efforts for more than 60 years by providing reliable and efficient electricity services.

What our group can see today is TNB is the only company in Malaysia who do
businesses in transmission and distribution of electricity to households. Based on
annual report of TNB in the year 2011, TNB is the largest electric utility company in
Malaysia with estimated RM73 billion in assets. The Company is listed on the main
board of Bursa Malaysia and employs more than 31,000 people to serve over
estimated eight million customers in Peninsular Malaysia, Sabah and Labuan. TNB
has remains a monopoly on the electricity supply of Malaysia. In Peninsular Malaysia,
the Company is a major contributor to the total industry capacity through six thermal
stations and three major hydroelectric schemes. It also manages and operates the
National Grid which links TNB power stations and IPPs to the distribution network in
the peninsula. The grid is connected to Thailands transmission system in the north
and Singapores transmission system in the south. It simply controls the price of their
goods (electricity). All houses and businesses in Malaysia must pay TNB to get their
electric.

Besides, by the year 1996, TNB had to go through actual internal restricting
with the evolution of many subsidiary firms like SESB (Sabah Electricity Sdn. Bhd.)
in the state of Sabah and SESCO (Sarawak Electricity Supply Corporation) in the
State of Sarawak. Summarily, TNB productions Sdn. Bhd. is charged with function of
production of a firm and the communication and distribution section get hold of by
TNB Communication Sdn. Bhd. and TNB Distribution Sdn. Bhd. respectively. Thus,
when the company are able to manipulate supply and demand, it will affect the prices
of the goods. Hence, Antitrust laws were created to help regulate price and maintain a
healthy market competition where they prohibit a variety of practices that restrain
trade.

Furthermore, the aim of the company is to convert the natural resources into
electricity which are needed to supply to the every household, outlets and power
plants in Malaysia. The electric industry is a monopoly market because the cost of
production will be reduced when there is zero competition. As a result, TNB is the
only company who distribute of electricity services in the country, Malaysia. In
addition, TNB also believes in providing service excellence and aims to attain global
leadership.

Key reference

1. Sloman, J., Wride, A. and Garratt, D. 2012. Economics. Harlow, England:

Pearson.
2. Buku teks econs
3. ABD GHANI, N., & MOHD ISA, N. (2011, November 17). Annual Report
Tenaga Nasional Berhad 2011. Retrieved December 6, 2015, from
https://www.tnb.com.my/assets/annual_report/AR11.pdf
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