TNB Monopoly in Malaysia

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Tenaga Nasional Berhad (TNB) is one of the monopoly firm operating in Malaysia consumer market. TNB is the largest electric utility company in Malaysia and largest power company in Southeast Asia. 
TNB Headquarter, Bangsar, Kuala Lumpur


TNB Manjung, Perak


As we know, TNB is the largest electric power provider in Malaysia and it is also known as one of the monopoly firms in Malaysia. EMIS (2013) also mentioned that TNB has the license to operate the company as a monopoly firm for 21 years initially. Basically, a monopoly firm can be defined as the one and only seller or producer that sells goods or services to buyers or consumers. Since TNB is the only electricity provider in Malaysia, TNB has full control over price. Thus, TNB has the power to increase the price without any valid or reasonable reason; and they would not worry that their customers will run away. This is because there is no close substitute for a monopoly firm and the company can practice “Take it or leave it” principle since consumer does not have other choices. Another characteristic of a monopoly firm is there is a non-price competition since there are no competitors. TNB is a natural monopoly.


TNB doesn't have worry about losing their customers when they increase the price of electricity because TNB is a monopoly. TNB is the main energy provider in Malaysia because there are no close substitutes for electricity generation in Malaysia. TNB is a price maker who has total control over the price of the electricity since TNB is the only firm in Malaysia who have the authority to provide electricity. Furthermore, the consumer are not sensitive to the price changes in electricity since TNB is the only firm in Malaysia who provide electricity services; therefore, TNB has a fairly inelastic demand curve.






In conclusion, TNB is a monopoly which has the market power to charge a higher price for electricity without losing the amount of consumer since TNB has a fairly inelastic demand curve. Therefore, TNB is free to charge a higher price for electricity as long as TNB is still the only firm in Malaysia who provide electricity services.




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