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MAKS Services Limited (MSL): Manning with Monopoly?

CASELET, MANAGERIAL ECONOMICS
ET Cases, 3 pages

Case Preview

MAKS Services Limited (MSL): Manning with Monopoly?

 

Karimnagar is a municipal corporation and the fourth largest city in the Indian State of Telangana after Hyderabad, Warangal and Nizamabad. The city is located 165 kilometres north of Hyderabad (the state capital), on the banks of Manair River (a tributary of the Godavari River). It is also the district headquarter of Karimnagar district.1

Many companies are located in the district. All these companies are from either agriculture, engineering, forest, mineral or animal husbandry sectors. As of 2011, there were 9018 Small Scale Industries existing in the District providing employment to 79,373 people. Most of the Small Scale Industries were Rice Mills, Parboiled Rice Mills, Seed Processing, Packaged Drinking Water, Flour, Chilly and Turmeric Mills, Saw Mills, Wooden Furniture, Power Looms, Readymade Garments Manufacturing, Stone Crushers, General Engineering Works, Milk Processing, Silver Filigree, Flex Printing, Screen Printing, Cotton Ginning Mill, Granite Processing, Cement Fly Ash, Clay Bricks, Paper and Tiles, Stone Dressing, Cement and Concrete Pipes, Motor Vehicle Repair, etc.........................

 



1 https://en.wikipedia.org/wiki/Karimnagar (accessed date: September 20th 2015)

Teaching Note Preview

MAKS Services Limited (MSL): Manning with Monopoly?

 

Synopsis

Nandu Kumar (Nandu) set up MAKS Services Limited (MSL), an organization to provide semi-skilled or unskilled workers (domestic help,office attendants, etc.) on demand at homes, offices, business setups, etc., in Karimnagar city. Nandu registersed semi-skilled/unskilled people who were on the lookout for employment, provided training and employment as domestic help, office attendants, facility staff, etc., in various government and private offices, business setups, homes, apartments, etc., within the city of Karimnagar. On one hand, the customers found MSL’s services satisfactory because of the background verification carried out by the company with respect to the recruits and ease of replacement. On the other hand, the recruits were happy as MSL provided them with a decent salary and extra benefits like PF, ESI, paid leave, etc. The only problem was that as MSL was the only player providing such organized services in the city and its services were highly priced in comparison to the fee demanded by the intermediaries or similar service providers operating in other cities. This caselet enables the  students or participants to discuss the concepts of varieties of Imperfect Competition, sources of market imperfections and the concept of Monopoly and Monopoly behavior.

Prerequisite Conceptual Understanding (PCU)/Before the Classroom Discussion

The participants should be asked to read the following chapter to help them connect the concepts discussed in the caselet:

  • • Paul A. Samuelson, et al., “Imperfect Competition and Monopoly”, Economics, 19th Edition (Special Indian Edition), McGraw Hill Education (India) Private Limited, 2014 – To understand the concept of Imperfect Competition and Monopoly

 

Case Positioning and Setting

The caselet can be used in MBA, Executive MBA or Executive Development Programs, for the following module/topic:

  • • Imperfect Competition and Monopoly – To understand the patterns, varieties of Imperfect Competition, sources of market imperfections and the concept of Monopoly and Monopoly behavior

 

Assignment Questions

  • I. What do you understand by Imperfect Competition? What are the various types of imperfect competition? What do you think are the factors responsible for the creation of the different types of market structures?
  • II. What do you understand by Monopoly and what is its behavior? What are the different types/reasons for monopoly? What do you understand by a competitive monopoly and can you make a reasonable case for competitive monopoly?
  • III. .............

 

Preamble to the Caselet Analysis and Suggested Orchestration

This caselet provides an opportunity to understand the imperfect market structures and the factors that lead to these imperfect competitions. It also introduces the students/participants to the concepts of monopoly, which is one of the important types of imperfect competition. Further, it helps understand the various types of monopoly. The caselet facts are analyzed for the cost, revenue and profit relationships under a monopoly. This caselet analysis was carried out as presented in Exhibit (TN)-I............

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Abstract


This caselet helps introduce the students/participants to the concepts of imperfect competition and monopoly. MAKS Services Limited (MSL) is an organization setup by Nandu Kumar to cater to the market demand of semi-skilled or unskilled workers (domestic help/office attendants, etc.) in Karimnagar, Telangana in India. MSL registers semi-skilled and unskilled people who are on the lookout for employment, provides training and employment as domestic helps, office attendants, facility staff, etc., in various government and private offices, business setups, homes, apartments, etc., within the city of Karimnagar. The customers as well as the recruits find it satisfactory and safe to use MSL's services. However, as MSL was the only player in the city with organized services in this field, the services were priced steeply, in fact much higher than the intermediaries and similar service providers in other cities. While customers vouched for MSL's services, they were wary of its costs. Can higher costs for the services provided by MSL be justified?



Pedagogical Objectives

  • To understand how the market conditions lead to imperfect competition and the various types of imperfect competition
  • To examine monopoly as a case of imperfect competition, different types/reasons for monopoly and evaluate the special case of 'competitive monopoly'
  • To understand the monopoly behavior of MSL and analyze the costs and output relationship in a monopoly

Case Positioning and Setting
The caselet can be used in MBA, Executive MBA or Executive Development Programs, for the following module/topic:

  • Imperfect Competition and Monopoly - To understand the patterns, varieties of Imperfect Competition, sources of market imperfections and the concept of Monopoly and Monopoly behavior




This Case Pack Includes:
- Abstract
- Caselet
- Teaching Note (**ONLY for Academicians)
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