Explain, why could the Saudi Electricity market be said as a Monopoly Market?

Economics by Geoffrey

Topic: Managing the Different Market Structures

Problem 1.

  1. Explain, how or why the commodity (say bottled water) market can be considered as a good example of perfect competitive market?
  2. Also, explain why is the long run market supply curve horizontal in long run in this kind of market?
  3. How does a competitive firm determine the quantity that maximizes profit?
  4. When might a competitive firm shutdown in the short run and exit the market in the long run?
  5. Moreover, explain why perfect competitive markets are regarded as the best market structure for the society?          [Marks: 1 x 5 = 5, obtained marks: ___]Problem 2.
    1. Explain, why could the Saudi Electricity market be said as a Monopoly Market?
    2. What are the main barriers to entry in the electricity supply market and how Saudi Electricity Supply Company (SESC) got the status of Monopoly power?
    3. Also explain why a monopoly firm (SESC for example) choose not to produce at its full capacity?
    4. How does monopoly affect society’s well-being?
    5. What is price discrimination and how it helps the firm and the consumers?