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2.3 Read the extract below and answer the questions that follow. ICASA SET TO BREAK MULTICHOICE MONOPOLY The Independent Communications Authority of South Africa (ICASA) raised an inquiry into pay TV broadcasting and proposed to restrict, among others, Multichoice monopoly of premium sports content. In redressing the recurring competition issues, major interventions were proposed such as shortening exclusive contracts, unbundling and splitting rights. The CEO of Naspers, an affiliate of Multichoice, considered it ridiculous to do away with exclusive rights on sports broadcasting, claiming that they pay for every player and all the lights at the stadium and the backrooms. [Adapted from http://digicastmagazine.com/2017/08/27] 2.3.1 Give ONE form of barrier to entry in a monopoly. (1) 2.3.2 What is the nature of the products sold by monopolies? 2.3.3 Briefly describe the term natural monopoly. (2) 2.3.4 Why would it be necessary to break Multichoice's monopoly? (2) 2.3.5 How would demerit goods contribute to market failure? (2 x 2) (4) 2.4 With the aid of a fully labelled graph, explain the supply curve of a business in a perfect market. (8) 2.5 Evaluate the effects of monopolies on an economy. (8) [40]Answer any TWO of the three questions from this section in your ANSWER BOOK. QUESTION 2: MICROECONOMICS 40 MARKS - 30 MINUTES 2.1 Answer the following questions. 2.1.1 Name any TWO methods of non-price competition in monopolistic competition. (2 x 1) (2) 2.1.2 Why do businesses in an oligopolistic market collude with one another? (1 x2) (2) 2.2 Study the graphs below and answer the questions that follow. Price MC AC Price / Revenue/Costs A 10 10 DD=AR=MR 0 Q Quantity 0 20 Quantity INDUSTRY INDIVIDUAL FIRM 2.2.1 Identify the equilibrium point of the individual firm above. (1) 2.2.2 Which time period is depicted in the graph above? (1 ) 2.2.3 What is the reason for the downward sloping demand curve of the industry? (2) 2.2.4 Why are businesses in this industry referred to as price-takers? (2) 2.2.5 How will new entrants (businesses) affect the perfect market? (2 x 2) (4)1.1.1 Withdrawals of money which will reduce the quantity of money in the economy is called ... A money flow. B injections. leakages. real flow. 1.1.2 A problem in public sector provisioning is ... lack of accountability. maintaining law and order. to protect its citizens against foreign threats. to conserve the natural resources. 1.1.3 The exogenous explanation for business cycles attribute to the expansion and contraction of an economy to ... A supply factors only B demand factors only. forces outside the market system D forces inside the market system. 1.1.4 When the state uses tariffs to discourage imports it is called ... A import substitution. export promotion. monetary policy. protectionism. 1.1.5 An organisation of the world's leading emerging economies is known as ... A Mercosur. B BRICS C SACU O European Union (EU) 1.1.6 These figures provide a systematic record of national economic activity. World Bank System of national account. Progressive personal income. D International Monetary Fund. 1.1.7 A policy driven by the SARB to stabilise prices by managing inflation is called the ... policy. A monetary B fiscal international trade D labour 1.1.8 A nationwide government intervention to create employment using labour intensive methods is called the ... A Black Economic Empowerment National Development Plan. National Growth Plan D Expanded Public Works Programme. (8 x2) (16)