Question

Choose a business operating as a monopoly in the UAE and comment on its pricing strategies. (eg. DEWA, ADWEA etc.).

Answer 1

Answer.

An example of a business monopoly in UAE can be the ENOC(Emirates National Oil Company) or the EPPCO (Emirates Petroleum Products Company) in which they are the sole distributors of oil, fuel and petroleum to those regions and are having the majority of stake when it comes to providing petroleum, gas, oil in UAE.

While commenting on the price stratagies, lets take it as two catogories,

HIGHER PRICE

In this case, the company Etilasat were to be in a perfect competition and would have competitors, it would charge its consumers a higher price in case if its competitors are giving the same product to its consumers but Etisalat changes the fact that it will also give the same product but offers the consumers not only the product but will deliver the product to their house, set up the entire telecom unit at the house and give them a 24X7 service in case of any emergency for which Etisalat can charge a higher price as compared to its competitors.

LOWER PRICE

Electronics company like a Samsung or Apple may decreases its range of prices if it was operating in a perfect competition. For example if the market is hit by a recession and the companies cannot cover their costs, they will sell their products at lower cost in the market to make money in the time of recession.

Hope I have answered your question correctly. Keep studying. Have a nice day.