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The Microsoft Case - Article Example

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Microsoft was investigated for antitrust behavior. In this paper, the proponent elaborately discusses some important points in order to take side on agreeing or disagreeing that Microsoft was trying to gain monopoly power in the computer software industry. …
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The Microsoft Case
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The Microsoft Case

Download file to see previous pages... Microsoft is trying to become a cut above the other. Its ability to create various ranges of product offerings strengthens its potential to cover the world market. For many years, Microsoft is said to be well known for its anti-competitive and predatory practices. This is the reason why it has remarkably investigated for antitrust behavior. Microsoft defended that it has definitely done what the other competitors would do in its place. Each key player is trying to be a cut above the other and wanting to take control of the market. The bottom line is money. This is how Microsoft and its competitors are motivated to stay in the competition and even want to be on top of the rest. Gaining monopoly.I personally agree that Microsoft is trying to gain monopoly in the computer software industry because of the remarkable market area it has to cover. It is in this reason that imperfect competition is most likely to exist. The other proof is the ongoing investigation it has to face due to its alleged antitrust behavior. One specific case is the Microsoft’s ability to offer products or services at remarkably lower price compared to its competitors. As a result, more consumers would try its service or product offerings. This can be illustrated by the demand curve. Downward sloping demand curve simply states the nature of human behavior and which simply showcases the principle that as the price decreases, the consumers are assumed to buy or acquire more. Microsoft at the same time holds the economies of scale which is one of its utmost competitive advantages. In the economies of scale more production would mean lower cost per unit of produced product. The marginal cost and marginal revenue are maximized for the advantage of the firm. Thus, this means efficiency of production and at some point Microsoft may be able to pursue or maximize its bundling strategy for its maximum advantage. As a result and under monopoly pricing, prices are controlled by the firm and the consumers have no strong market power. The people are not the price maker in this case, but the firm instead. However, Microsoft can hardly obtain pure monopolistic power for as long as there is a continuing presence of the Silicon Valley giants such as Sun Microsystems, Intel, Apple Compute and others. Ideally, in a monopoly market structure, there is only a single seller; there is presence of unique product; and impossible entry into the market (Tucker, 2010). Thus, a pure monopoly’s characteristics include single seller, no close substitutes, price maker and there are barriers to entry and exit (Vallabhaneni, 2009). However, what is present today is showing us the fact that Microsoft can har ...Download file to see next pagesRead More
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