business economics

Information QUESTION 3 Flag question Read the case study and answer the following questions Market Structure and competition in the South African banking sector The nature of concentration in the banking industry in South Africa has been the subject of concern for authorities. This concern has resulted in two key inquiries and follow-up reviews of these inquiries. The inquiries have found significant indicators of anticompetitive practices within the industry. What these inquiries have failed to do however, is to establish an unequivocal relationship between the level of concentration and competition in the market. There is a total of 35 banks in the South African banking industry. Of these, 10 are locally controlled, 6 are foreign controlled, 14 are branches of foreign banks and 3 are mutual banks. There are also 38 authorized foreign bank representatives who do not take deposits. Furthermore, there are 2 banks in liquidation. The sector experienced rapid entry of banks into the industry post-apartheid between 1994 and 1999. The majority of these new entrants were small to medium locally controlled banks. By 1999 however, these banks were experiencing liquidity pressures. A significant number of them exited the market or were absorbed by the existing larger banks. Between 1999 and 2003, about 22 banks exited the industry (Mboweni, T.T., 2004). The estimated H statistic suggests that banks operate in a monopolistically competitive market structure. Munacinga Simatele (2015) http://creativecommons.org/licenses/by-nc-nd/4.0/ Question 33 3.1.a. In light of the above case study, identify and discuss the type of market structure applicable to the Not yet South African banking sector. Your discussion should include: The characteristics of this market structure answered (10) Marked out of