Answer to Question #210577 in Microeconomics for SIMPHIWE

Question

Explain why denel is regarded as a monopoly in South Africa

Answer 1

The privatization of the Denel company in south Africa does not eliminate its power to exploit the customers. Denel is a company in South Africa that supplies defense equipment to the south Africa national defense Force, and it operates in the absence of competition. Therefore, in the absence of competition, the company can reduce production and raise prices.