The behaviour of a firm depends on the features market in which it operates. With reference to the criteria below, identify a relevant Monopoly in South Africa and explain how the selected firm aligns with the market criteria for a Monopoly.
- The number of firms in the market
- The nature of the goods or services sold
- Ease of entry for new competitors into the market
- Control that the firm has over price
Answer.
A relevant monopoly is south Africa is South Africa breweries (SA breweries) which is a monopoly.
- Number of firms in the market relating to South Africa breweries is just one firm. The reason for having only one firm is due to the absence of competition.
- The nature of goods and services sold have their own specific brand . The brand of the goods and services are unique as there is no similar products within the market.
- Ease of entry into the market. Its not easy to enter into the firm. Being a monopoly, many barriers are put in place this discouraging many entries.
- The control that the firm has on pricing is that the firm is entirely responsible for pricing of their products. They can underprice or overprice depending in their liking.
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