Question

Can Denel be regarded as a monopoly in South Africa (for 20 marks)

Answer 1

Answer:

Yes, it can be considered as a monopoly.

Explanation:

• Denel was founded as a non-public company, however because of the nature of its primary industry, weaponry, it can't be taken into consideration an ordinary client-orientated corporation.
• Armaments have the strength to kill and destroy, amongst other things, which other client items and offerings do now no longer have or are unmeant to accomplish.
• The organization is taken into consideration a monopoly. According to conventional view, privatizing a public monopoly does now no longer cast off monopoly's strength or the possibility of misusing it on the cost of customers.
• In the absence of competition, the monopolist can be forced to lessen manufacturing and as a result boost prices.

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Answer 2

Answer:

Yes

Explanation:

• The South African government has expressed interest in privatisation Denel, although the process has already lasted six years, with little progress.
• Denel can without a doubt be considered a public monopoly at the moment.
• According to conventional wisdom, privatising a public monopoly does not eliminate the monopoly's power or the prospect of abusing it at the expense of consumers.
• In the absence of competition, the monopolist may be compelled to reduce production and hence raise prices.
• There is also concern about job losses, particularly in South Africa, which has a high unemployment rate, as well as concern about unregulated weaponry sales and exports, particularly to fundamentalists and governments with a terrible human rights record.

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