BUSINESS ECONOMICS ARTICLE REVIEW 3
alteration on MC may not interfere with the prices at the market. The few firms in Singapore that
will be left after phasing out some firms that stock substandard refrigerators will try everything
possible to maximize profits. As all the firms in the market seek to maximize their profits, it will
reach a point where there will be an equilibrium in terms of profit maximization at P1 and Q1. At
this point, the Singaporeans will have got used to the few firms in the market and the policy of
the National Environmental Agency. At this point, P1 and Q1, the Singaporeans firm will be
focusing more on improving their businesses so as to woo more customers to them (Salop,
2012).
Price wars that are short-lived are also expected among the few firms in Singapore. For
instance, firms may alter the prices of refrigerators so as to achieve some short-lived advantages
that may come up. For instance, if the Singaporean government advertises that there is a need to
supply refrigerators to one of the public institutions, the firms will tender with different prices
and the one with the best prices will get the opportunity to supply the refrigerators.
Monopolistic competition is also possible in Singapore after the policy of National
Environmental Agency.
(Salop, 2012).
