monopolists usually make economic profit in the long run explain why eskom is a profitable company recently motivate your answer by referring to BHP billions contract with Eskom
Answers
Explanation:
BACKGROUND ESKOM is electricity public utility company of SOUTH AFRICA established in 1923 It is responsible to generate, transmit and sell the electricity in SOUTH AFRICA It generates about 95% of electrcity consumed in SOUTH AFRICA and 45% of electricity consumed in Africa Hence it is almost a monoply company in South Africa Normally monopoly companies generate profits in long run On the contrary ESKOM reported Profits R 7.1 bn in July 2014 and R 3.6 bn in Aug 2015. For the first time there was load shedding in 2013-14 and further load sheddings in 2014-15 due to unexpected plant breakdowns The reason for reduction in profits is linked to Contracts with companies like BHP Billiton BHP Billiton is anglo australian multinational metals company based in PERTH (Australia) In 1990's when there was electricity surplus with ESKOM in SOUTH AFRICA,...