...abusing their position as the leading supplier of computer operating systems. Lawmakers investigated to see if Microsoft was trying to create a monopoly of the computer software market. They found that Microsoft was trying to cause a monopoly in the computer industry. Here are the facts that support their findings. Microsoft developed Microsoft Office products that catered to the needs of professional in all types of fields, these products will only operate in a Windows operating system, which is a Microsoft system. When the early stages of the internet stared, Microsoft tried to push out and eliminate their competitors when it came to web browsing. It provided Internet Explore free of charge in all of their operating systems. This was at a time where people were being charged for AOL or Netscape Navigator. Microsoft was guilty of “exclusive dealing”. This is a regulation that gives them sole rights to a certain product. This prevented their competition from entering the market with their products. Microsoft used a pricing schedule which was a benefit for Windows users, but if you were on a different operating system products or services would cost more. This was often a deterrent for people that uses a different system that Microsoft. Yes, agree that Microsoft tried to monopolize the market. Monopolies can affect both the market and the providers. It can cause artificial pricing, a demand for products that are always in short supply, and have...
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...Price discrimination: For a firm to engage in price discrimination, at least one of the following conditions should be met. Either a firm should be operating in monopoly market or a firm should discourage discount customers from becoming resellers or a firm should have extensive customer data to segment its customers into different price elasticity of demand groups. I believe that house painting firm would engage most in price discrimination because, the painting firm has the opportunity to observe its customers and access how much a customer is willing to pay to paint his/her house before quoting price for the painting job. With this information, a house painting firm is in better position to engage in price discrimination. Other factors such as inability of the customers to resell the service and the costs involved in getting the competitive quotes help painting firm to engage in price discrimination. Manufacturer that produces racing boats also has the opportunity to observe its customers and access how much a customer is willing to pay for boat. Also another aspect that racing boats are purchased only by a few set of people and if the manufactured can get race winners to buy racing boats from them, then the manufacturer can show price discrimination towards other customers because, many people will believe that boats manufactured by that manufacturer are of superior quality. But again since manufacturer will not be able to prevent the customer who avails a racing boat...
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...jnARTICLE ANALYSIS The Analysis of the Article Microsoft's Aggressive New Pricing Strategy Using Microeconomic Theory I. Introduction: monopolistic power as a means of getting high profits The review of the article Microsoft's Aggressive New Pricing Strategy in terms of microeconomic theory A. B. C. Microsoft as a monopolist in software industry Google as the main company’s competitor at software market Strategies taken by Microsoft to regain the competitive power and combat the global financial recession III. Conclusion: Microsoft as a company which operates at monopolistic and oligopolistic markets. 2 II. ARTICLE ANALYSIS Introduction Monopolistic power is a profit earner for many companies. It prevails in spite of the presence of government regulations against the formation of monopolistic power in the market, which brings in deformity in the competitive scenario. One of the vivid examples is the monopolistic power Microsoft has enjoyed (Burrows, 2009). A monopolist has the power to set any price they find reasonable for getting high profits. However, a monopolist cannot set both the price and quantity to be purchased at the same time. This article shows how a monopolist can charge whatever price it deems to but it is not in their power to set the quantity of the product demanded. Therefore, a monopolist must increase prices in order to gain market share. Further, a monopolist sets different prices in different places. This price discrimination depends on the demand...
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...Division, Chemical Division, and Forest Products Division. This paper will summarize the advantages and limitations of supply and demand, the effectiveness of structure, and will analyze how each market structure maximized their profits. The market structures represented in this paper are Perfect Competition, Monopoly, Oligopoly, and Monopolistic Competition. Perfect Competition According to the simulation the Consumer Goods Division operated in a market that perfectly competitive. There were several buyers and sellers, each of the sellers being a price taker and there were no barriers to entry. The limitations or advantages of the Consumer Goods Division are as follows. The competition is high so the demand for their service will be low. Continuing to supply this service would mean the company would have to spend more on improving the quality of its service so as to maintain and increase the demand. In the simulation, the first decision made was whether to cease operations in the Consumer Goods Division or to continue operations and minimize any losses. Monopoly The second scenario in the simulation the Coal Division had the viewer’s look how they operate in a monopoly structure and determine the best method to maximize their profits. Even though the company has the option to raise their prices, setting the prices at the highest value will only maximize the revenue not maximize their profits. By adjusting their price at a lower amount $7.85 per ton, the output will decrease...
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...Nicholas Messina Econ201 What are some of the different types of barriers to entry that give rise to monopoly power? Give an example of each. Should government let monopolists exist or not? What are the benefits of monopoly market structure and what are those shortcomings related to monopoly? What is your opinion? (At least two pages and write down the answers to each question asked) In a perfectly competitive market, there are many firms, none of which is large in size. In contrast, in a monopolistic market there is only one firm, which is large in size. This one firm provides all of the market's supply. Some conditions that determine a monopolistic market is the fact there is only one firm competing and has entire control over supply of product with no close substitutes. The second is that there must be a high barrier to entry to explain why other firms have not yet entered the market. What are some of the different types of barriers to entry that give rise to monopoly power? Barriers to entry are defined as legal, technological, or market forces that may discourage or prevent potential competitors from entering a market. There are many different types of barriers that include government barriers, control of a physical resource, technological advancements, and large start-up costs. Governments may erect barriers that prohibits or severely limits new competitors. This is done in many cities and states that may allow a household to only use one certain energy, water...
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...Rent-Seeking-the pursuit of a gain greater than the “normal” return or profit from the market-oriented production and sale of a product to consumers. It has sometimes been referred to as political profit-seeking, rather than market-based profit seeking. Market-based profit-seeking is based on private business devoting time, money and resources to making new, better, and less expensive goods and services to sell to consumers. Profits are earned by doing better than competitors in satisfying consumer demands. Political profit-seeking (or “rent-seeking”) is based on using time, money and resources to gain privileges, favors, subsidies, and anti-competition regulations from the government at the expense of consumers and potential competitors. It is the method of special interest groups trying to use government to benefit themselves. Resources, money, time go into political manipulation and influence, rather than market-oriented production. P1 and Q1 would be the price and output produced by a competitor in an open, competitive market. But suppose it was possible to influence the government to have a regulation passed making you the single-selling monopolist, and all other sellers would be regulated out of the market. P1 and Q1 would be the price and output produced by a competitor in an open, competitive market. But suppose it was possible to influence the government to have a regulation passed making you the single-selling monopolist, and all other sellers would be regulated...
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...Introduction The legislation process of Anti-Monopoly Law has been indeed a long journey. The new AML is a tremendous leap forward for China, bringing China into the modern world of antitrust and competition law. The law, which aims to prevent dominance of any one company, was first proposed in 1994. But its pace was slow until 6 years later because of pressure from big state-owned companies and multinationals that had just started doing business in China. It wasn't until 2001, when China joined the World Trade Organization, did the process accelerate. In August 2007, the law was finally passed by the National People's Congress. Although the measure compromised with state-owned enterprises, which dominate industry, people tend to believe it will make way for free market competition against monopolies. It's gained a lot of praise and set a milestone in China's legal history. In our daily life, we can face several kinds of monopolistic practice, for example, if your grocery store sells you a bag of tea with the condition that you buy a pound of sugar that would be a tie-in sale. In this paper, first, I will show the detail in the China competition law, then I will specific the monopolistic practice in Price discrimination which I think we usually face most in our society, and in the last part will be the impact of the Anti-monopoly law. China competition law On 30 August 2007, after more than a decade of legislative efforts, the Standing Committee of the National People’s...
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...Minimum Wage This assignment is to address the minimum wage within the market structure and maximizing profits. The market structures are competitive market, monopoly, and oligopoly. Minimum wage had been established to protect the work force from employers paying them low wages and to allow the employees to maintain a minimum living standard to protect against poverty. The United States Federal Governments current minimum wage is $7.25 an hour. Many states use this figure or increase the wage due to their cost living. California has increased theirs to $8.00 an hour. The cost of living is high in California and businesses have higher expenses compared to some other states. Many individuals have moved out of California because they cannot afford to live here. The minimum wage is still too low for one to maintain a normal living standard. They are unable to keep a roof over their head and food on the table. When there is an increase in the minimum wage the employees rejoice but the companies that have to pay it are not as happy. This increase is an added expense and the companies need to decide how the cost will be recouped. They will either pass on to the consumers by increasing the sell price of the goods to be sold or they will cut the difference in wage increase from another area. Companies will look at reducing their work force which may reduce the amount of production and/or the customer service the buyer would receive. Those with fewer skills and with less experience...
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...Marketing Structures & Maximizing Profits XECO/212 Sunday, October 21, 2012 Market structures are the makeup of a particular market. Market structure can be described with reference to different characteristics of a market, including its size and strength, the number of buyers and sellers, form of competitions, extent of product differentiation, and ease of entry into and exit from the market. Markets are broken down into four various structures. These structures are perfect competition, monopolistic competition, monopolies, and oligopolies. The structure of each market is based on the traits of its business type. The attributes a business will display changes with the number of firms in that particular market. One of the four markets is a perfectly competitive market. This market is an opposite of a monopoly market, because it has many sellers, it has many buyers, and many products that are very similar. Similar products mean their competition is high, as there are many substitutes to choose from close by. Prices in a competitive market are determined by supply and demand, leaving the producers subject to price demands and very little influence; competitors in this market are also known as price takers. No participants are large enough to have the market power to set the price, but both consumers and producers can influence the price. There are very little barriers to entering the market. A perfectly competitive market plays an important role in the...
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...The Affects of Monopolies on Our current Microeconomic Situation More than anything else, the progress of the world in the 21st century depends on economics. The microeconomic situation of the United States has several determining factors contributing to it's current status. What we earn, what we save, what we spend, how deligently we work and retain our jobs is all part of the microeconomic system that controls our daiy lives. Another large factor hindering the success or downfall of the current economy is the effect of monopolies. By defintion a monopoly is a large company that has exclusive control of a commodity or service in a particular market giving them the power to manipulate prices. In a sense a monopoly is the logical result of competition. The roles of a monopoly in microeconomics severly affect the manner in which individual businesses can effectivly conduct their business in more than one way. Monopolies have forever affected our economy but these following pages are more of a generalized overview of the affects they have had strictly in the 21st century. One role of a monopoly in microeconomics is the effect it has on the pricing of goods and services. Monopolies can impact consumer prices in two obviously different ways, they can cause prices to drop so low that it forces companies out of business, or it can cause prices to skyrocket making it difficult for consumers to purchase a product. Neither of these options are necessarily good for the consumers...
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...CUSTOMER LOYALTY : THE CASE OF MOBILE PHONE USERS IN UNIVERSITI UTARA MALAYSIA Prepared by Meguellati Achour Pn. Nor Pujawati Md. Said Dr. Ali Boerhannueddin Abstract Service quality, switching barriers, and brand image are the major antecedents of customer loyalty, and loyal customers may buy more, accept higher prices and have a positive word-of-mouth effect. Also we know that the cost of selling to new customers is much higher than the cost of selling to existing customers, also the cost of attract new customers is much higher than the cost protect existing customers ten times. Although this fact is apparent to everyone, many companies are still losing customers at a formidable rate. In this context the main aim of this research is to examine the relationships between these factors and customer loyalty in the Universiti Utara Malaysia sector. Based on the theoretical model, a comprehensive set of hypotheses were formulated and a methodology for testing them was outlined. These hypotheses were tested empirically by questionnaires to demonstrate the applicability of the theoretical model. The results indicate that service quality, switching barriers, and brand image are separate constructs that combine to determine the loyalty, with service quality and switching barriers exerting a stronger influence than brand image. Finally hypotheses H1, H2 were supported, while hypothesis...
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...1. In this case yes partnership was the answer. Microsoft was not always as focused on corporate citizenship as it is today. They had a negative imagine of being an unstoppable power buying up everything in their path. So when the Kosovo crisis came to be 1999 Microsoft stood to not only offer help to thousands of suffering people, but to also improve the company’s imagine. These partnerships succeed in doing just that. When both partners stand to gain for the partnership, as they do in this case, then the partnership is the way to go. UNHCR gained all the assistance in helping the refugees, and Microsoft gained a favorable public image. The company can leverage all its assets pro bono publico. Microsoft did in this partnership. They offered cash and software to UNHCR, also the time and expertise of employees, the management skills of executives and online marketing strategy. 2. I would say that Microsoft is creating the right partnerships when it comes to expanding their market and raising opportunities. Years before Microsoft’s partnership with UNHCR, citizens pictured Microsoft as a company that walked all over other companies because they had so much money and power. This created a bad image for them and I feel they needed to make a move to recreate their image. Helping out refugees showed that Microsoft as a company had good intentions and was there for struggling people. Not only did this raise opportunities for Microsoft with all of their new successful technology...
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...#1261458 Finished Time: 11/05/2012 Google's Monopoly and Internet Freedom By JEFFREY KATZ Wall Street Journal, June 7, 2012 http://online.wsj.com/article/SB10001424052702303830204577448792246251470.html Never is the issue concerning monopoly and perfect competitive market failing to attract our eyes. And this is also a hot topic we discussed in our economics course. According to the article, Google, the most popular search engine in the world, controls nearly 82% of the global search market and 98% of the mobile search market. Its annual revenue is larger than the economies of the world's 28 poorest countries combined. And its closest competitor, Bing, is so far behind in both market share and revenue that Google has become, effectively, a monopoly. A monopoly refers to a situation wherein there is a single seller of a product or service for which there are no close substitutes. A single company dominates its area; squeezes out all its competitors thus gaining control over the entire market and inevitably can dictate the price of the product or service. While in the perfect competition market, many firms produce identical products, and competition forces them all to sell at the market price. Firms face perfectly elastic demand curves at the price determined in the market because no firm is large enough to affect the market price. Compared with perfect competition, monopoly is inefficient. First of all, monopoly will create the deadweight loss for the market. A...
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...3.3 UK Competition policy and Regulatory bodies Competition Policy The Competition policy covers the different ways in the competition of national governments and also the EU seeks to make markets work better & achieve higher level of the economic efficiency and economic welfare. The competition policy focus on the discourage of competitive behavior. This wills covers in which the competition of the national governments & EU seek to the better work of the markets to achieve higher level of economic efficiency. The main expectation of competition policy is to make the market contribute to increase efficiency and competitiveness of the UK economy within the single market of EU. There are main objective – * Technological innovation * Protect and secure the standards of anti-competitive behavior. * Effective price competition between suppliers. The coco green company should follow these objectives to gain the UK market. Main Aims of Competition Policy Main aim of competition policy is to promote competition & make markets work better & contribute towards to increased efficiency & competitiveness of the UK economy. within the EU single market. Competition policy is aims to ensure: * Wider consumer choice in the markets for goods & services. * Technological innovation in which promotes gains in the dynamic efficiency. * Effective price competition between the suppliers. * Investigating allegations of the anti-competitive...
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...and fixed and the firm faces a multitude of competitors, all producing perfect substitutes. In these circumstances, the purely competitive firm may sell all that it wishes at the equilibrium price, but it can sell nothing for even so little as one cent higher. Monopoly power also depends upon elasticity of the demand curve. If the demand curve is less elastic the monopolist has a greater degree of control. As the demand curve becomes more flexible or flatter the monopolist’s control starts declining. Question # 6 * There are many factors involving in the price change in pure competitive and monopoly firms. The producer can face different price from both firms. Competitive firm have many competitors so that they cannot increase or decrease price as they want but in monopoly they can. The producer always interested to get higher price so monopoly firm can pay producer more to get the products. Economics of scale may be such as to ensure that one large firm can produce at lower cost than a multitude of small firms. This is certainly the case with most public utilities. And in such industries as basic steel making and car manufacturing, pure competition would involve a very high cost. On the other hand, monopolies may...
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