Economics Unit 3 Gp

The Microsoft Monopoly TrialThe U .S . Justice department presented an Antitrust eggshell against Microsoft with the tip that the comp some(prenominal) had used its near monopoly position in the run remains grocery store in to gain an unfair vantage in the web browser mart The Justice segment had claimed that this demeanor on the part of Microsoft is disadvantageous for consumers as well as squiffys in the package industry . But Microsoft had asserted that the software industry is quite competitive in whatever spring , and while Microsoft is a large organization , it did not exchange br unbeatable trade power by any means . The company had added that its software solutions are actually pop off away merchandises for the consumers ( Microsoft . And this , of course , must be a bring in to the prudence rather than a curseIn a consummate(a)ly competitive securities industry there are many firms come forthing a intersection point or usefulness . A monopoly , on the contrary , is the provided firm in a particular market . The market impairment in the industry is determined by the generate and lease for the product or service in challenge . As the market bring home the bacon drop-offs , the value of the product increases (Samuelson Nordhaus , 1998 A monopoly is in a precise good position to flow supply and thereby increase the charge that it charges for the product or service it provides . And , since it has no competitors , there is no compulsion to decrease the price in to beat arguing (Samuelson NordhausHowever , the monopolist faces a going away because now there are fewer buyers for its products or operate , given that the price has increased So as to moon curser the decrease in profits the monopolist would fix on a price that is higher than its bare (a) constitute . If the marginal cost is r! epresented by the supply wrench , the monopolist would decide to provoke a sum that is little(prenominal) than the amount at the intersection of the demand and supply curves , that is , the quantity produced in a state of better competition (Samuelson Nordhaus match to economists , the blood little free weight down Loss of a monopoly must be borne by the entire economy seeing as the monopoly is charging a price higher than is charged by the intersection of the demand and supply curves in a state of perfect competition , and to a fault producing a quantity that is lower than the quantity produced in a state of perfect competition . The following graph reveals this Dead lean Loss (dwl where MSC is b methodicalnessline tender price in interaction with MSB or Marginal affable Benefit (Samuelson NordhausThe monopolist may decide to slide by increasing the price by reducing the quantity it supplies , and thereby increase the Dead Weight Loss to society (Samuelson Nordhaus . This is incomparable why the U .S .

Justice Department must replace to put an end to monopolistic practices in favor of perfect competitionThe Justice Department had claimed that if Microsoft were to gain a monopoly in the browser market , the consumers would be facing a loss in terms of increased prices and reduced supply The Justice Department had also argued that if Microsoft were to become a monopoly innovation in the adjoin market would be reduced . In other spoken communication competitors must be allowed to equally produce innovative solutions in the industry . Besides , if Microsoft s creation were to become the dominant electronic nedeucerk br! owser the company itself would have less of an incentive to produce enhanced products in to beat competition ( Microsoft . As a matter of fact , quality enhancement is one of the goo characteristics of perfect competitionThe Internet browser market is said to be able to allow only one or cardinal large companies due to the staggering costs involved (Krugman . The rein in court and the appeals court agreed that when they considered the Microsoft model , the company s market share of the operating system market was no less than eighty portion and could exceed ninety five portion (Mckenzie , 2004 . Thus , the government was correct in presenting an Antitrust case against the company . Control of Microsoft s near monopoly position may in truth well eliminate the possibility of a Dead Weight Loss to society caused by Microsoft s business ReferencesKrugman , Paul . loopy Microeconomics . Available athttp /web .mit .edu /krugman /www /soft .html . Accessed 20 aerial lati tude 2006Mckenzie , Richard B (2004 . Monopoly : A Game Economists Love To look - severely ! SouthernEconomic Journal Vol . 7 , Issue 4 , pp . 715Microsoft : Is The gild also Big ? Available athttp /www .humboldt .edu ee3 /econ104 /s /monopoly . Accessed 20 declination 2006Samuelson , Paul A , and William D . Nordhaus (1998 . Economics . raw(a) York : Irwin McGraw-Hill PAGEPAGE 5 ...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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