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The microsoft case - Assignment Example

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The Company have also introduced application software that run in the operating systems. The applications are like the Ms Office Suite that is commonly…
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The microsoft case
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The Microsoft Case Microsoft investigated for antitrust behavior Microsoft engages in manufacture of diversified computer software and a family of windows operating systems. The Company have also introduced application software that run in the operating systems. The applications are like the Ms Office Suite that is commonly used by numerous users in the world. Therefore, products of Microsoft are complementary to the operating systems in both serves and personal computers (Economides, 2001).
The Company was investigated for antitrust behaviors due to violating the Act that prohibits companies from monopolizing, attempts for monopolization, conspiring or combining with other people with the motive to monopolize part of a trade among several States. However, Microsoft was aiming at gaining the monopoly power in the PC market (Economides, 2001).
Do you agree or disagree that Microsoft was trying to gain monopoly power in the computer software industry?
Yes, I do agree that Microsoft was trying to gain monopoly power in the computer software industry. Microsoft mismanaged the opportunity of being the leading market holder in the computer industry, which led to antitrust behavior investigations. The Company had managed to attain 95% market share through antitrust behaviors (Brinkley & Lohr, 2000).
The reports led to the investigation for determining whether Microsoft is aiming at establishing a monopoly in the market of the computer software. There have been numerous facts proving that Microsoft was making efforts monopolize the industry of software. The creation of Microsoft Office as a package that comprises of packages that are entirely assisting the professional was a deliberate move to monopolize the market. Microsoft was also sued due to developing an operating system that had Windows Media Player; thus, engaging the real media player in unfair competition (Brinkley & Lohr, 2000).
Are monopolies always disadvantageous?
In Monopoly markets, Companies have market power in given segments that involve the production of commodities. The Monopolies are also the price makers of the products produced. In the case where Government Monopoly is involved, the government controls accessibility to production. The Government monopoly relates to a monopoly of government cooperation or an agency. However, there are Pros and cons to the natural monopoly. The natural monopoly results due to businesses that require a high start up costs in order to operate in a given business. To the company, monopoly ensures that unnecessary competition is avoided; this results to increased marginal revenue and strong brand name (Tucker, 2010).
Monopoly ensures that an organization enjoys economies of scale due to high quantity of production. The economics of scale relates to costs advantages that a monopoly can enjoy due to expansion. This results to the company incurring lower marginal cost that results to high economic profits. The economic profit is realized when the revenue surpasses opportunity costs of inputs. Marginal cost changes are attributed alteration in production. If a company engages in an imperfect competition in order to hold a monopoly, it becomes subject to the legal actions for the other competitors or federal government. This is evident in the case of Microsoft being involved in antitrust suit. The antitrust suit focuses on reducing the uncompetitive behaviors in the market and with business practices that are unfair.
References
Brinkley J. & Lohr S. (2000). U.S. v. Microsoft. New York: McGraw Hill.
Economides N. (2001). “United States v. Microsoft: A Failure of Antitrust in the New Economy.” UWLA Law Review. Retrieved on 15 May 2012 from< http://www.stern.nyu.edu/networks/UWLA.pdf > Tucker B. (2010). Survey of Economics. Ed 7. New York: Cengage Learning Read More
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