Market structures are of various types in the modern economic system. If the analysis is based on the producers market, then monopoly market structure is an exclusive example of a market structure without competition. …
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The essay tries to focus in the exclusive monopoly power of the popular software company Microsoft. Though very rare, business firms in the contemporary world often enjoy the power of a monopolist seller (Chass, n.d.). A monopolist market structure is primarily characterised with a single seller and many buyers in the industry. The products produced by a monopoly seller may or may not be differentiated. It should be carefully analysed that since the monopoly seller is the only major producer in the market, it faces the entire market demand. Thus, the price or average revenue (AR) curve and the marginal revenue (MR) curve faced by monopolists are always negatively sloped. Figure1: AR and MR Curve of a Monopoly Producer AR, MR Price or Average Revenue Curve (P or AR) Marginal Revenue Curve (MR) Quantity (Source: Authors Creation) The above diagram shows the AR and MR curve faced by a monopolist. A monopolist seller is a ‘price maker’ in the industry....
The policies of the government in an economy are also influenced by the power and decisions of a monopolist in the market. Microsoft Behaviour Microsoft Corporation is a famous American software company with its headquarters in Washington. At the current market conditions, business firms can never imagine to operate without the use of computers. The rise in the level of literacy in both developed and developing economies have increased the use of computers for both commercial and non commercial purposes with time. Most of the computers in the modern world comprise of an operating system of Microsoft. Such technical products supply has made Microsoft behave like a monopolist in the market. In 4th April 2000, the Federal government claimed that Microsoft Corporation has violated the antitrust laws in the market. Antitrust laws are the laws set with the mixture of federal and state government laws. The antitrust laws are strongly implemented on all the business organizations in the modern world because such laws prevents the economy from the unfair trade practices of monopoly business firms and promotes competition in the economy. It is believed by economists and analysts that rise in market competition in the business segments would help to augment the net social welfare in the economy (Manne, 2012). Bundling of Netscape and Media Player The Federal Justice department accused Microsoft Corporation for altering the satisfaction of the consumers by shifting competition in the software marketplaces in particular with the disbursement of the Netscape browser. Microsoft desired to bundle its business with the famous company of web browser Internet Explorer. The company
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The present situation is APE< GDP = ASF. There would a response from the producers by decreasing unemployment, reduction in prices and output. This will make the ASF line to move rightwards and the GDP and APE line to move leftwards. The economy attains a position which is shown in the figure.
The comparison is carried out between these two factors. In the ratio of Ann’s to peter’s case, Ann has a lower utility function than peter because peter is on medication. The amounts that peter will spend on medication makes him more vulnerable in spending.
The public’s demand for the two company’s products and services generated projected gains. Before the merger, several financial analysts opined that the proposed merger would be very successful (Baumol, 2011). Many quarters predicted the business after the merger will be rosy.
The demand side of the market comprises of the owner and the renter while the supply side comprises of the developer as well as the renovator. In order to analyze the demand and the supply factors a number of modifications need to be implemented in the microeconomic assumptions.
One of the significant areas of economics especially is macroeconomics which is a branch of economics that deals with the problems of a particular country or economic region comprised of several economic agents acting with their individual economic behaviors and the evaluation of the policies taken by the government of these countries in order to tackle those problems (Adams, 2002, p.
vaccinations against infectious diseases). Briefly suggest how government might intervene to correct this under-provision? 5 (C) The Consumer Price Index (CPI) is the official measure of inflation in the United Kingdom. Why might CPI not be an accurate measure of the costs of living for any given individual consumer?
Macro & Micro economics Introduction China is one of the fastest growing economies in the world. Being the second-largest economy, China has shown tremendous growth in the last three decades. According to the estimate of 2012, China’s GDP is US $12.38 trillion (CIA, 2013).
The company has got eight business divisions with potential to serve the customers adequately. Microsoft follows a mission statement which claims, “We are committed long term to the mission of helping our customers realize their full potential”. The company acquired this position through constant innovation, update and improvement of their products through acceleration of new technologies as they emerge (Microsoft, 2013).
Name: Student Number: Short Essay: Macro & Micro Economics 1. Write a paragraph explaining why a “technology-based” water pollution-control standard might not be the most economically efficient (or cost-effective) way to achieve a given level of reduction in water pollution.
The wants created by the individuals in the economy are always unlimited in nature but the resources available are scarce. It has been stated in the theories of economics that perfect competition among the corporate firms in the economy can maximize the welfare of the society and suffice efficient resource allocation.
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