2.3 Study the illustration below and answer the questions that follow. PUBLIC SECTOR PROJECT: Building cost CHEMICAL FACTORY Labour force High-quality equipment Increase in revenue Natural resources Increase in savings Pollution New job opportunities Quality service delivery R12 m High-quality product R16 m COST BENEFIT 2.3.1 Identify ONE external cost in the project above. (1) 2.3.2 Identify a social benefit in the project above. (1) 2.3.3 What can the government do to reduce the external cost of the project above? (2) 2.3.4 How will the government benefit from the approval of the project above? (2) 2.3.5 Why should the government do a cost-benefit analysis before starting each new project? (2 x 2) (4) 2.4 Differentiate between productive inefficiency and allocationefficiency. (2 x 4) (8) 2.5 How may differentiated products influence consumers and producers in a monopolistic competitive market? (8)2.1 Answer the following questions. 2.1.1 Name any TWO institutions that regulate unfair competition in South Africa. (2 x1) (2) 2.1.2 How will producers benefit from minimum prices that are implemented by the government? (1 x 2) (2) 2.2 Study the graph below and answer the questions that follow. ECONOMIC LOSS MC Cost/Revenue (R) ATC F 90 Economic loss 50 MR 100 Output 2.2.1 Identify the market structure in the graph above. 2.2.2 Give the value of the market price depicted above. ( 1 ) 2.2.3 How will this equilibrium position change in the long run (long term)? (2) 2.2.4 What conditions must exist for this firm to shut down? (2) 2.2.5 Calculate the economic loss faced by this firm. (4)2.1 Answer the following questions. 2.1.1 Give any TWO examples of positive externalities. (2 x 1) (2) 2.1.2 Why do people in rural areas sometimes pay higher prices for goods and services than those living in urban areas? (1 x 2) (2) 2.2 Study the graphs below and answer the questions that follow. THE MONOPOLY Price Revenue The prices of goods and services in a monopoly market are subject to the highest revenue it can obtain and the R50 demand for the product. R40 MR dd=AR Revenue 10,0 120 Quantity Highest revenue obtainable TR 100 120 Quantity 2.2.1 Identify any factor that can influence the prices of goods and services for the monopoly. (1) 2.2.2 At what price must the monopolist sell to obtain maximum revenue? (1) 2.2.3 What is the nature of the product of a typical monopolist? (2) 2.2.4 Which curves are required to determine how much profit the monopolist will make? (2) 2.2.5 Why will you discourage the monopolist from increasing the price of the product drastically? (2 x 2) (4)2.3 Study the graph belovv and ansvrer the questions that follow. HDNOPOLY 2.3.1 What is the selling price of the business above? {1] 2.3.2 Identity the letter in the graph above that represents the loss minimising point. {1] 2.3.3 Briefly describe the term monopoly. {2] 2.3.4 Why.' is the equilime position above typical of the short run? {2] 2.3.5 Determine the loss for this business. Show ALL calculations. {4] 2.4 With the aid of a well-labelled graph [cost and revenue curves}, explain the shut-down point for the individual firm in a perfect market. {a} 2.5 Evaluate the impact of collusion on the economy. {8} [4] 2.1 Answer the following questions. 2.1.1 Give any TWO examples of natural monopolies. (2 x 1) (2) 2.1.2 What is the main purpose of markets in the economy? (1 x 2) (2) 2.2 Study the extract below and answer the questions that follow. NEW AMENDMENTS TO COMPETITION ACT The government introduced the Competition Act, 1998 (Act 89 of 1998) to promote competition and enhance the efficiency of the South African economy. The Competition Commission, Competition Tribunal and Competition Appeal Court play an important role in the administration of the Act. Companies that are suspected of collusion are investigated and if they are found guilty, they are fined heavily. In the new amendment of section 73A of the Competition Act, provision is made for new criminal sanctions to be imposed on individuals. [Adapted from Businesstech.co.za, 2016] 2.2.1 Which institution imposes fines on companies that are guilty of collusion? (1) 2.2.2 What is the role of the Competition Appeal Court? 2.2.3 State any ONE aim of the competition policy. 121 2.2.4 How does competition in the market benefit the consumer? (2) 2.2.5 Briefly discuss the success of the competition policy of South Africa. (2 x 2) (4)