Econ312 - Microsoft Monopoly Case

ECON312 Week 3 Assignment

Content

Abstract

Introduction

Monopoly – Good or Bad

Microsoft – The Case

Conclusion

References

Abstract

If you look over the United States v. Microsoft case, there is strong evidence that Microsoft was attempting to create a monopoly in the computer software industry. Microsoft's dominance of the x86 based computer operating systems market, as well as Microsoft’s actions to eliminate threats to that monopoly, are evidence of that. And on April 3, 2000, the court’s ruling left no doubt that Microsoft had committed monopolization and attempted monopolization.

Introduction

ECON 312’s week 3 assignment takes a look the Microsoft Monopoly Case, specifically why Microsoft was investigated for antitrust behavior. The author’s opinions on whether Microsoft was indeed trying to gain monopoly power in the computer software industry and whether monopolies always bad are also discussed. Examples of a good and bad monopoly will be included as well. The assignment will be at least 300 words in an essay format in APA style. Economic terms that have been covered in prior discussions will be used throughout essay. Key economic concepts will include barriers to entry into the market, natural monopoly, government monopoly, economies of scale, monopoly pricing, and bundling.

Monopoly – Good or Bad?

A monopoly is defined as a single entity that owns all, or almost all, of the market for a particular product or service. To summarize, when there is a barrier to entry into any industry that allows a single entity to operate without any competition, you have a monopoly. There are pro’s and con’s for monopolies in the market. A monopoly market structure can affect both the market itself and the provider. One con would include having a demand for your product that you cannot keep up with. If supply is running short it could cause prices to rise. If the manufacturer causes the supply to be kept at a low level,...