The shifted the demand curve and supply.

The increase in demand in
raw water shifts the demand curve to the right (D to D1), and as a result the
equilibrium price increases from P0 to P1. While the equilibrium quantity
increases from Q0 to Q1.Supply curve remains unchanged, but the quantity
supplied increases as the price of water increases. There is an upward movement
along the supply curve from E to E1

Question 2

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Back in the time of
apartheid in the 1980s and 1990s, water was an owned infrastructure by the
whites. Black people were not given the privilege of using water as they
please, thus the water resources were distributed to the black South Africans
at a very low rate compared to whites. (Anton Earle, Jaqui Goldin &
Phemo Kgomotso, 2005).

According to Anton,
Jaqui and Kgomotso (2005) they reported that until the new democratic country
was established and introduced in South Africa where Water Service Act of 1997(No.8
of 1997), Section 3(1) stated a quote from that Act saying, “Everyone has a
right of access to basic water supply and basic sanitation”. It was then where
the population started to grow since there were more black people coming from
the apartheid and thus shifted the demand curve and supply.

According to Water Wise
(2018), they further explained and listed other factors that caused the shift
in demand in raw water, namely:

DroughtGlobal warmingPopulation, David Makovah (2018), asserts
that the South African population growth in has increased from 35 million from
1994 to 55 million in 2018.Pollution and the destruction of river
catchmentRaw water qualityApartheidPricing, as the price of the good rises, the
quantity demanded of the good falls. (David Makovah, 2018)

Question 3

Social grants have been recognised
and pointed the one of the infrastructure which waste money for the country
especially the child support grant. One of the critics was picked on the news
where they elaborated that over the past 23 years the number of social grant
has increased from an estimated 4 million in 1994 to 17,443,994 by October
2017. (Louise Ferreria, 2017).

Type
of grant

As
at 2017 (October)

Grant
for older persons

3,369,513

Disability
grants

1,070,648

War
Veteran’s grant

180

Foster
child grant

478,158

Child support
grant

12,196,981

Grant-in-
aid

181,672

Social
relief of distress

Paid
in various circumstances.

The above table is
formulated from the information on Louise Ferraria’s (2017) findings.

3.1 What Impact does the social grant have to
our country?

According to Louise Ferreira
(2017), she identified the following causes:

Grants make people lazy and dependent to the
government, off which very true, people is especially youth they don’t study
and look for better job instead they become pregnant at an early stage knowing
that they will receive grant money from the government.She further asserted that there is corruption
also involved where people or parents rather claims grants for children who
don’t live with them.Parents or guardian misuse the grant money.
Buying alcohol instead of buying food or school necessities for the child.

3.2 Building economically enabling
infrastrure

Building the infrastructure
for the country won’t be only benefiting the person as such but also the
country as the whole. Since Government adopted an infrastructure plan that is
intended to transform the economic landscape of South Africa, and in addition
creating a number of jobs especially to the unemployed youth of the country. (Lekgotla,
2012).

According to Lekgotla
(2012), he continued explaining that by creating new growth path they are
setting 5 million new jobs by 2020, similarly overcoming the structural
problems in the economy, and setting opportunities in certain markets and
sectors. He further emphasised the laying of the basis for higher growth in the
country.

Infrastructure development
will shift the demand curve for the employment rate and will push suppliers to
have more space for new workers.

Question 4

4.1Private School

As a parent/guardian there
are many factors that you look at when choosing a school for your child, e.g.

Affordability. Location. Extra-curricular activities.Tertiary acceptance. Religious and cultural and gender
preferences.Scholastic support (Mbatha, 2018)

4.2 Discovery Medical Aid

As a parent again weighing
the importance of private school and Discovery medical aid is very important, the
following aspects should be considered before choosing a medical aid:

Checking if your children are frequently
hospitalised or with chronic diseases, e.g. eye problems, BP, asthma and etc. Geographical area will also play a role as to
how far the public and private hospitals are next to your area.Affordability as well is a crucial part to
consider

4.3 Conclusion

It will depend which area
the child hails from as there are very good schools in some townships/suburbs
and therefore there is no reason to take them to private schools. According to
Michelle Gumede (2017) reported that even Angie Motshekga was impressed about
the rural and township 2016 matric results. The Free State is pointed as the
massive rural province yet they achieved the country’s best results with an
overall pass mark of 93.2% in 2016. (Michelle Gumede, 2017).

Many schools from KwaZulu
Natal, Limpopo and Eastern Cape are also suffering, where they are still
without electricity, proper shelter, books, libraries, and teachers.  Being said that, yet we do have distinctions
coming from those areas.

There are affordable medical
aid which a parent can pay less compared to Discovery Medical Aid. If a parent
is frequently taking the children to hospitals, she/he will rather opt for
hospital plans from another service provider which she can pay less compared to
Discovery Medical Aid. On the other side saving every month for doctor’s
consultations will also be an option while having a hospital plan which is
cheaper and affordable. (Mbatha, 2018)

According to all the
research and interviews mentioned above, as a parent I will personally opt for
medical Aid (affordable e.g. Bonitas, Germs, etc.), depending on my
geographical location. School is the good investment for a child but education
is dependent on self-discipline. If a leaner is in good government school than
there is absolutely no reason to take them to a private school I would rather
choose having a good health and pick my child’s work rate to achieve top marks
i.e. several A’s which are attainable.

Furthermore choosing between
the two is not easy as this is dependent on individual’s needs and priorities,
some people may survive without both i.e. no private school and no Discovery Medical
Aid and still be very successful.

 

 

 

 

 

Question
5

5.1 Monopoly

“Monopoly is a market
structure in which there is only one seller of a good or service that has no
close substitutes”. (Philip Mohr & associates,
2017, p. 180).In
South Africa there are a few number of monopolist firms, the three firms would
be:

Transnet, Eskom
and De
Beers.

Transnet is characterised
as a monopolist firm, as it is the South Africa’s state transport company.
Hence Transnet has control over the price of their services, meaning they are
the price maker and they determine the price level by deciding what quantity of
transport to produce. (Lumen, 2017)

According to Lumen (2017)
they confirm that by looking at the case of Eskom, they distribute electricity for South Africa. It is
insufficient to have more than one provider due to the high cost put up to
power line. Since Eskom set their price they can decide to raise their prices
at any time and most of consumers would still continue to purchase electricity.

According to The Economist
(2004), De Beers is the world’s largest producer of rough stones. De Beers only
sell their stones to their invited clients at a no-negotiable price which
happens ten times a year.

“With its near monopoly as a trader of
rough stones, De Beers has been able to maintain and increase the prices of
diamonds by regulating their supply. It has never done much to create jobs or
generate skills (beyond standard mining employment) in diamond-producing
countries, but it delivered big and stable revenues for their governments.
Botswana, Namibia, Tanzania and South Africa are four of Africa’s richest and
most stable countries, in part because of De Beers”. (The
Economist, 2004)

 

 

5.1.1 Profit-maximising

“We assume that the
monopolist firm aims to maximise profit”. (Philip Mohr & associates, 2017, p. 182). For example Eskom
is the sole supplier of electricity in SA; the market demand for electricity in
South Africa is also the demand for Eskom’s product. The market demand slopes
downward, the monopolist can only sell an additional quantity of output if it
lowers the price of its product. (Philip Mohr & associates, 2017)

According to Philip Mohr (2017), he confirmed that a, monopolist does
not have a supply curve showing the quantities that will be supplied at
different prices of the product. Since the monopolist is the price maker and
does not move along a supply curve as the price of the product changes.

5.2 Oligopoly

“An Oligopoly is a market dominated by a small number of strategically
interdependent firms.” (David Makovah, 2018, p. 104)

Off
course South Africa has oligopoly industries in key sectors, to mention just
three amongst them

Building
and ConstructionFinancial
institutionMedia

The
monopolistic status quo has led some into a cartel like behavior where in the building
and construction industries they club together to determine and cap pricing
which then stifles competition. This would automatically stop new entrants
(small and medium businesses). In some instances they then subcontract some of
their work into small and medium businesses paying them less which then affect
the quality of service delivered.

The
finance industry has been alleged to be involved in found fraudulent
activities. I.e. bank charges where 17 South African banks were liable for
payment of 10% admin penalty of their annual turnover (BusinessTech, 2017)

The
Media is being generally perceived to be politically bias and indirectly
pushing certainly political parties’ agendas, also taking itself as an active
participant in developing and directing the countries’ narrative. Research news
about media and African National Congress complains. (Joyisani Maromo, 2017)

Question 6

 

Cartel does not only affect consumer welfare, it also delays the
development and innovation of the small and medium sized businesses. (Corlia Van Heerden & Monray Marsellus
Botha, 2015, p. 309).It becomes a barrier for new
entrance, and dies automatically hence this promotes corruption and fraudulent
activities and also perpetuates inequality.

According to Van Heerden and Monray Botha (2015), they further confirmed
that since the cartel are collusive, deceptive and secretive it is very hard
for smaller businesses to get the information or to compete with them.

Challenges faced by small and medium sized
businesses

They suffer
from the effects of collision in commerce and public procurement.They are
forced to consume less or none of the essential goods due to high prices set
through the cartel activity.They are
denied access to markets or subject to exploitative conduct by cartels (UNCTAD secretariat, 2013).

Talking of the construction companies being involved in the cartel in
South Africa, where the big construction companies like Murray Roberts,
Stefanuti, etc. were involved in rigged tenders and fixed prices. (Philip Mohr & associates, 2017, p. 193). The smaller
businesses end up secretly setting up or joining a cartel with their
competitors due to this struggling and failing to maintain profits.

Question 7

Every firm or manufacture’s main goal is to maximise profit, quality
product, employee well-being, etc. Taking into consideration the marketing and
pricing of the product. (David Makovah, 2018, p. 69)

No matter how much Mercedes sell or don’t, they still need to pay their
fixed cost i.e. Salary, land etc. According to David Makovah (2018), he defined
fixed costs as cost that remains constant regardless of the volume of the product
or service that you sell. If the sale of Mercedes goes up, so do variable cost
and vice versa. David Makovah (2018) stated those variable costs are cost of production
that varies as output changes.

If the buyer is buying a C200 she/he would still be enjoying the benefits
of economies of scale because he will still be driving Mercedes-Benz hence taking
a C200 which is R581, 206.00 and E200 which is R835, 606.00 (Mercedes-Benz, 2018).

Selling more C Classes will benefit Mercedes-Benz in profit maximising,
the lower the price the higher the demand of C200.

Question 8

South Africa is the rich country with masses of commodities that it can
use instead of importing them to other countries, and buying them again from
those countries. For example platinum and gold South Africa is the source of
these commodities and they are not using their skills to make more money with
them.

The reasons why South Africa’s manufacturing industries are declining
are:

Lack of demand
in the economy for manufactured goods in recent yearsLack of stable
electricity supply has seen South Africa firms manufacture less due to unstable
electricity gridIncreased
imports of manufacture goods from other countries

What can South Africa do to compete with other countries i.e. China? (Cherlyn-Anne
Smith, 2017)

For South
Africa to benefit from other countries especially China it need to modernise
its manufacturing industry.It must change
or create ways of not importing their natural resources to China in order to
create jobs and see its economic growth thrive.