Outline any 5 disadvantages of Eskom as a monopoly​

Eskom is the electricity provider of South Africa and is a monopoly because it is the only company allowed to provide power.

The disadvantages of Eskom being a monopoly are:

1. Higher prices for Customers

Because Eskom is a monopoly and does not compete with other utility companies, it can charge higher prices as there is no alternative.

2. Less Productive efficiency.

There is no competition so Eskom does not see the need to become more efficient and produce electricity better because they don't have to compete with anyone to improve their efficiency so that customers are not taken from them.

3. Less willingness to cut costs

Eskom might have high costs which makes it expensive to run but they won't bother cutting these costs because as the only provider, there is no need to cut costs to improve profitability if you can just increase prices instead.

4. Less incentive to invest in new technology

Again there is no need to compete so Eskom will not see much of a need to invest in technology which would give it an edge over competitors because there simply aren't any competitors.

5. Consumers have less choice.

Eskom is the only producer so South Africans can't simply switch to another provider. They have no choice but to accept Eskom.

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