Answer to Question #207499 in Microeconomics for vtg

Question

Using the Structure Conduct Performance (SCP) paradigm, discuss the current ‘state of affairs’ o of the following South African industries.

- Banking Industry

- Telecommunication Industry

- Electrical Power Industry

- Fast Foods Industry 

Answer 1

The structure- conduct- performance paradigm states that market structure is a determinant of a firm's conduct which in turn determines it's performance.

1. Banking industry - in south africa, covid-19 has left an outlook that looks desperate in the banking sector. The ratings of the top five banks in the country have been brought down. However, despite lower earnings and risks that have been inflated on assets rising credit risks, banks are likely to maintain moderate economy boosters in the industry over regulatory requirements. Banks in the country could cut down on dividends to boost up capital.
2. Telecommunication industry- in south africa, learning and working from home has raised the demand for connectivity. this heavy reliance on connectivity has brought about concerns on the affordability of data in the country. The government has forced the telecommunication industry to reduce the cost of mobile data and to also provide some small amount of free data to prepaid users. The industry now feels the pressure of reducing margins inspire of raising usage, which requires them to continually invest in network upgradation and putting up more deployments.
3. Electrical power industry - challenges facing the electrical supply industry have intensified with the covid-19 pandemic thus placing a heavy burden on the economy while there is a severe load shedding that has been imposed inspiteof a fall in demand.
4. Fast foods industry - fast foods , takeaways have extremely been limited due to covid-19 pandemic. The fast foods industry is generally low wage and labor intensive, with workers who mostly depend on tips. This means employees in this sector are people who do not save much and they often have many dependants. The running of this industry is basically steamed up by its customers most of who are workers who take away drinks and snacks on short breaks at work ,and hence imposition of a restriction on the working of restaurants offering fast food services has adversely affected this industry, this is because there has been a large cut down in the sector's income due to a decrease in customers who are now working from home.