The Market
How markets work, competition and monopoly
How Markets Work
In a market economy, buyers and sellers make decisions based on supply, demand and prices. Competition between businesses benefits consumers — it leads to lower prices, better quality and more choice. A monopoly (only one seller) can charge high prices with no competition.
Example
Competition in SA
Healthy competition: Many cellphone companies (Vodacom, MTN, Cell C, Telkom) compete for customers → better deals, lower prices
Monopoly concerns: Eskom is the only electricity supplier → no competition → poor service
Competition Commission: SA government body that prevents unfair monopolies and price fixing
Note
Remember
Competition is good for consumers but challenging for businesses — they must constantly improve. SA has a Competition Commission that investigates unfair practices like price fixing (companies secretly agreeing to charge the same high prices). Free and fair markets create the best outcomes.
Key Vocabulary
CompetitionBusinesses trying to attract customers from each other
MonopolyWhen only one business sells a product (no competition)
Market economyAn economy where prices are set by supply and demand
Consumer choiceThe ability to choose between different products and sellers
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Competition
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