Answer to Question #319318 in Economics of Enterprise for Gert

Question

Deregulation within the airline industry was introduced in South Africa in 1991. Before deregulation, South African Airways (SAA) was the only service provider on the main domestic airline routes as well as the international airline routes. The first decade after deregulation resulted in a wave of low cost airline competitions such as Flitestar, Sun Air, Phoenix Air, Nationwide, 1time and Velvet sky entering the domestic market. 

SAA functions within a free-market economy, which is characterised by which of the following attributes?

a.   Private ownership of production factors

b.   Free competition

c.   Profit motive recognised

d.   Limited right to strike in state enterprises

Answer 1

a.   Private ownership of production factors