Microsoft As A Monopoly Essay

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Microsoft is one of the most recognisable, profitable and valuable companies in the market today. One of the popular versions of Microsoft windows, Windows Vista, is the topic that will be discussed. Microsoft is referred to as a monopoly in the market because it is a single supplier with exclusive ownership of a unique product (Economics Online, n.d.). Microsoft holds a patent which essentially gives the producer exclusive rights to sell the product and as a result they are able to completely dominate control over the software ‘Vista’. “Patent and copyright laws are easy to see because these laws give one producer monopoly, they lead to higher prices than would occur under competition.” (Gans, King, Stonecash, & Mankiw, 2012, pg. 325). Microsoft can gain substantial profits, and “would be able to derive the greatest monopoly power.” (Economics Online, n.d.).
Markets are constantly changing and whether a business is operating effectively in the market will depend on how they operate with or without market power. A monopolistic, like Microsoft, is free from competitive pressure and should run efficiently to promote growth in the market. Each industry in the market is sectioned into different products or services, and with the impact of globalisation, monopoly power is becoming increasingly hard to gauge and it may not exist at that point in time. (Monopoly and Economic Efficiency, n.d.). This quote is explaining how the market for monopolies is becoming more inefficient and hard to gauge. Monopolies can lead to a less competitive and efficient economy as a result of limited or absent competition. If more firms were to produce vista, the market would become perfectly competitive and efficient because consumers would have a competiti...

... middle of paper ...

...etween rival computer chips (AMD and Intel) than between rival computer operating systems.
Microsoft is in a monopolistic market where the company is able to derive the greatest monopoly power in setting high prices and high barriers preventing competitors from entering the market. This essay has explored Microsoft and the software ‘vista’ in a monopolistic market, and has been compared to the company in a perfect competition. Competitors for products in a duopoly market and their price competition have also been discussed. The efficiency of the current market Microsoft is and the choices Microsoft would have to make in a perfect market have been investigated. In its current state, Microsoft holds a patent which essentially gives the producer exclusive rights to sell the product and as a result they are able to completely dominate control over the software ‘Vista’.

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