InternaL assessment for Economics

1. ‘Aionia Tukuafu
ID number: s11131115
Vava’u Campus
Tonga Power Limited (TPL) is firms in which it provides sources of electricity as a product of
consumer goods due to the increase of the willingness of consumers to use and tends to demand
more, that mislead to inflation as a general increase in prices as well as causing a deflation as
price are decreasing. Thus Tonga Power is a limited liability company in which their purpose
stated “own by state enterprise providing reliable, affordable and safe electricity as its core
service in Tonga sustainable. Tonga Power stated that they provided electricity to four major
island groups including Tonga, Vava’u, Ha’apai and ‘Eua”. (Board)Thus this company consist
Board of Directors and run by many shareholders. Tonga Power Limited tends to be a monopoly
market firm due to the characteristics as followed below:
 Restrictions on entry into and exit out of the entry.
 Supplying unique products and single suppliers
 Specialize information about production techniques unavailable to other
production producers. (Board)
Throughout this research, there are more consumers which tend to demand for electricity due to
their everyday needs and wants such as iron, TV, mostly light usage and of course other need
(Board).Graphs below shows number of consumer demanding for electricity monthly(2015).
(Company)
With consumers in the four main island grids of Tonga seeing on-going electricity price
decreases in recent months, the introduction of this new price cut will come as another welcome
boost for many. The February decrease will reduce the price by a further 8.5% (Company) This
shows that the relationship between the firm and the community set out the core purpose of the
business. Tonga Power Limited contains more than 6 employees that individually had separated
of duties and rotate in time of need. Electricity cannot run without oil which they are
complement goods. Oil assists on running the firms to produce the output of electricity in a long

2. period of time. Thus electricity had a substitute good when electricity are power off, which are
solar system generating energy from the sun as well as generator which causes deflation and
inflation as oil increase.
The main reason for inflation of electricity is that price of oil is increases too. An employee’s
states, “electricity price depends from the price consumes of oil”. ('Aipolo, 2015) The cost of oil
directly impacts the cost of electricity as Tonga Power Limited reliant on oil generation. This
causes Tonga Power states that each month the electricity tariff decrease effective from power
consumption each month. Electricity and oil are interdepence. The table provides the existing
tariff that Tonga Power Limited provides for last month (2015). With the new price decrease
coming into effect next month, customers will be able to see a reduction in their monthly
household bill.
Bibliography
'Aipolo, M. (2015, August 26). Changes price of the electricity. ('. Tukuafu, Interviewer)
Board, T. P. (n.d.). Tonga Power Board. Retrieved from
http://www.tongapower.to/Home.aspx
Company, T. P. (n.d.). Tonga Power Limited. Retrieved from Vavau Montly Usage:
http://tongapower.to/Customers/MonthlyUsuage/VavauMonthlyUsuage.aspx
Islands
Existing Tariff Seniti
per kWh
Decrease Seniti per
kWh
New Tariff Seniti
per kWh
Tongatapu 87.79 -7.52 80.27
Vava'u 87.79 -7.52 80.27
Ha'apai 87.79 -7.52 80.27
'Eua 87.79 -7.52 80.27