Answer to Question #220629 in Microeconomics for Kgau

Question

Can denel be regarded as monopoly in south Africa

Answer 1

Denel is not a monopoly. Privatizing a monopoly never eliminates the power as well as prospect of taking advantage and abusing it at customers' expense as expressed by conventional wisdom.

Denel tends to be the only supplier of main arms in South Africa, however it never has the monopolistic pricing power. Therefore, it cannot be regarded as a monopoly.