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Macro & Micro economics. Windows by Microsoft - Essay Example

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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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Macro & Micro economics. Windows by Microsoft
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Macro & Micro economics. Windows by Microsoft

Download file to see previous pages... 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 ...Download file to see next pagesRead More
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