Answer to Question #316275 in Microeconomics for Nobuhle Ledima

Question

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 1

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.