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The Microsoft Case - Assignment Example

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This paper "The Microsoft Case" concerns itself with the Microsoft antitrust behaviour which resulted from its action of creating and enforcing a universal operating system in personal computers, which dictated the kind of computer that an individual would use…
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The Microsoft Case

Download file to see previous pages... Market barriers influence the players in the market. Microsoft case developed an operating system that could not be used by other firms. Attempts by other firms to develop a system that would substitute products for Microsoft have been futile. This has limited the players in the market. Microsoft uses the market barrier to safeguard the profit of the corporation. The natural monopoly occurs when the startup cost for a particular business is quite high. The high start-up cost will lock firms or individuals from venturing into a specific line of business. The government may come in to regulate cases of natural monopoly because it aims at protecting its consumers.
Natural monopoly may lead to deadweight loss to society. The case of Microsoft cooperation is not the natural monopoly because many firms are willing to get into the market but Microsoft has consistently produced operating systems that have made it difficult for the firms to penetrate the market.  A government monopoly is a case where cooperation owned by the government supplies the product in the market without competition. The demand curve slopes downward because of the relationship between quantity demanded and price of the products. Demand increases with a decrease in prices. Microsoft enjoys economies of scale due to the expansion it makes into the market. The price setting power lies in the hands of the firm that enjoys the monopoly. In this case, Microsoft enjoys monopoly pricing. When firms are in competition, market forces would act as the price marker. In conclusion, monopoly creates incomplete competition in the market. ...Download file to see next pagesRead More
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