Econmics(_Microsoft_case quesitons ) Essay Example | Topics and Well Written Essays - 1000 words

Econmics(_Microsoft_case quesitons ) - Essay ExampleMicrosoft became a monopoly because the company was able to create and mandate the use of their take universal data interaction standards to be eventually used in all personal computers. Microsoft was self-made at implementing their strategy because, unlike their competitors at the time Apple and Commodore, Microsofts philosophy was to create an direct system that allowed any computer be it for personal use or business to operate and pass by and communicate with each other seamlessly (Fisher, 2000). 2) When a firm decides to behave monopolistically it recognizes its influence over market price. In the case of a monopoly, instead of allowing supply and demand to determine the highest price the market impart bear, monopolies pick a level of production widening and pricing structure that maximizes their own net profits. For a monopoly profits argon maximized when marginal costs equal marginal revenue. A we can see on the graph the bit where Q* and P* intersect corresponds to the point where MC=MR. If marginal revenue is less than marginal costs, its economically expedient for the firm to choose to produce less than the maximum output since the savings in costs would more than than make up for the increased marginal revenue. If a company operates in a competitive purlieu instead of being a monopoly production output would be in line with the point in the graph (pl) where price equals marginal costs. Thus in general a monopolistic marketplace is characterized by having higher prices and lower production when compared with an open competitive market. As a rule a monopoly will be very inefficient since a monopolist will produce a level output less than the competitive amount and is consequently Pareto inefficient. Monopolies are detrimental to consumer interests since they allow companies to create abnormal profit levels by obligating consumers to pay higher prices and due to a lack of any competition, pr oduct quality, innovation and categorization will also be negatively affected. 3)From its inception, in order to protect is market share, Microsoft by design created its run systems to restrict easy integration and interoperability between PCs using their Windows operating system and conclave servers not utilizing Microsofts server operating system. The company utilized the practice of bundling its browser internet Explorer to their Windows operating system without providing the user other browser options by default. The company was also finable of tying its Windows Media Player with its Windows Operating System which currently has a around over a 90% market share in the European Union (Statcounter, 2011).The European Union investigation concluded that Microsoft was nominately and illegally withholding interface information from its competitors in order to put them at a disadvantage. This is in clear violation of Europes antitrust laws. 4) The European Union was originally cr eated in 1958 with the purpose of stopping the wars in Europe. Six countries originally joined the EU Germany, France, Italy, Netherlands, Belgium and Luxembourg. Soon with the political and economic advantage of the union many of the other European nations joined the union and today it has over 27 part countries including non European nations such as US, China, and Japan. Today the