Question

Private tuition centres are a big industry in Singapore with over 500 such centres that reportedly serve more than 95% of all college students. Tuition fees can be high and some families pay more than $3000 a month to send their children to private tuition. Using the theory and models of market structure, examine this industry. Should government be worried about any aspect of how an industry with this particular market structure will perform?

Answer 1

Answer :-

Since there are 500 tuition centers and 95% of the students goes to these centers, at that point it demonstrates this industry to be a monopolistic competition.

It is considered as monopolistic competition, since, tuition centers are price setters and charge significant expense for the services based on product differentiation as various teachers offer distinctive quality in their tuition. The industry has tremendous number of buyers and sellers, and there is free section and exit.

Thus, it is a monopolistic competition. This industry has firms as tuition centers that can procure positive economic benefit in the short run, yet over the long haul, they will gain zero economic benefit.

However, the organizations or tuition centers can have abundance limit, yet new firms can enter and provide food the students.

In this way, government is just required to direct the industry as far as no any enemy of serious arrangement and against trust strategies ought to be trailed by any huge or little centers with the goal that price can be controlled or littler firm can be put out of the market.