| University | Singapore Management University (SMU) |
| Subject | Business Economics |
Assignment Details:
Amidst the liberalization process of Singapore’s retail electricity market, five licensed retailers have exited the market. There are now 13 firms supplying electricity in the residential retail market, once monopolized by Singapore Powers.
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(a) Explain what determines whether a firm should exit the market in the face of strong competition from other firms.
(b) Discuss whether market liberalization is always the solution to misallocation of resources caused by a monopolistic firm.
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