Question 4

Two firms dominate the cinema industry in South Africa: Ster-Kinekor and Nu Metro. Although these firms essentially offer a homogenous product, each firm attempts to differentiate itself in the eyes of customers.

Marks will be awarded for the ability to integrate theory with the scenario provided.

Q.4.1 Identify the type of market/industry structure that is applicable to the cinema industry in south africa. Justify your answer by referring to the main characteristics of this market structure.

Q.4.2 Explain the concept of non-price competition in the context of the cinema industry using examples to illustrate your answer.

Q.4.3 Government may prevent possible abuse of market power by these firms within the industry. How would the government achieve this?