Question

According to an exclusive report by KPMG, a world-renowned accounting organization, apps like WeChat and Alipay in China, and Grab in Malaysia are what we termed as ‘super apps’. These apps usually bundle together online messaging (similar to WhatsApp), social media (similar to Facebook), online shopping (like Shopee), e-wallet (like Touch ‘n Go eWallet), and services (like Uber). These super apps are designed with one thing in mind—to monopolize users’ time so that there is no need for them to use a variety of apps.

a)How does the monopoly of super apps result in the transfers of income?

b) Discuss how the big data obtained by these super apps can be used to collect all consumer surplus for themselves.

c) Is super app can be considered as a price maker?

d) In lieu of (c), will a super app always charge the highest possible price at all times?

e) “Being a super app guarantees economic profits.” Discuss whether this is a valid statement.

f) What are some ways that existing super apps may attempt to prevent rivals from entering into the market? Discuss an example.

g) How does super app compare with single-purpose apps in terms of price, output, and efficiency?

Answer 1

a) Super app is a single app that clubs a bunch of services Noin the interdent ecosystem. Chinese app offers a mashup of what supp , Facebook, instagram, PayPal, twitter and more. Due to the implementation of chinese super apps a major part of income will be transfer to china and creates a monopoly of chinese company in the market. It will increase the competitions ans systematically lead to lower demand for other apps. Malaysia grab app also aims the same . Later people move on from whats and Facebook etc to these super apps due to the ease of aces. china and Malaysia introduced super apps for becoming the monopolists powers in the area of apps in near future. these super apps will definitely become a challenge to other apps tomorrow. thereby china and Malaysia will Malaysia to earn whole income generated in abbe d]this to their accounts.

B) If the demand of super apps Malaysia, prodder supply increases. Data collected by third parties through smart hone apps like we chat and grab can include anything from profile informations like age gender location details, including data from near telephone towers and WiFi roots, etc. Estimating consumer surplus is challenging because it requires identification of entire demand preclusive contracts for consumer data pose significant antitrust concerns independent of merger considerations.reduction in consumer surplus is substantially lower substantially pricing with uniform pricing.

C) China and individualized is trying to eliminate the Malaysia players of apps by replacing those with super apps. Thereby soon they become strongest monopoly firms in competitive. In economics monopoly firm is the price maker simply because of the absence of competition from other firms market the monopoly from other firms having to adjust the prices. It has the power to influence the price it charges as the good it produces which Reece have substitutes .The price maker is a profit maximizer because it will increase output only as long as its marginal revenue is greater than marginal cost.

D) The super app will charge highest price possible ever because they has the complete right in price making. If they became monopoly powers the consumers need to pay the amount charge by the company. China focuses on becoming monopoly firms in future to make huge profits out of it,. super app eliminate the other apps from the market by increasing demand for their products. China soon becomes a strong player in filed of apps. so ther is no doubt that they charges high price ds for app.

E) The statement is valid because the super app statement profits. economic profit is the difference between the revenue received from sale of super app and cost of all input used as well as any all cost. In that opportunity super app ensure profit seance it has only less input cost. tus if super app get popularity because people they can earn huge economic profit.

F) One of the major problem with regard with other app are storage capacity. So if china and Malaysia introduces super app with high storage capacity they will able to prevent the entry of similar app to market.  Highly differentiated products or well-known brand are both barriers to entry that can lower the threat of new entrants. Significant upfront capital investments required to start a business can lower the threat of new entrants.

G) super apps are very Malaysia compared to norm al app because it operates number of functions in a single touch. customers need not to download various app for different needs. it is very cost different also. it helps to save storage space of mobile phones. it includes wide range of features of apps like whats, whats, twitter et. The price of grab and we chat is Facebook too low. thereby it increase the demand for super thereby in market.