Question 3

(a) SingTel is the largest telecommunication firm in Singapore. It is also among the largest companies in market capitalisation listed on the Singapore Exchange and its shares are among the most actively traded ones in the stock exchange. Consider the market for SingTel shares. Based on the pricing behaviour, the nature of product, the easiness of entering and exiting the market as well as the availability of information, discuss the market structure for SingTel shares. Support your answers with relevant market and individual seller diagrams. (10 marks)

(b) Compare and contrast between perfect competition and monopoly. Explain their differences in terms of social welfare with the help of a suitable diagram. Discuss the economic implications of these two (2) market structures and support your answers with a real life example. (12 marks)

(c) After liberalising the telecommunications market in the 1980s, the Singapore government has decided to liberalise the electricity market. Starting from November 2018, besides Singapore Power, electricity consumers can have the option to buy electricity from 12 retailers. Discuss and explain the advantages and disadvantages of liberalising the electricity market in Singapore in terms of productivity, efficiency and welfare. (8 marks)