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Is Microsoft A Monopoly? How Has Microsoft's Monopoly Affected Consumers?

3004 words - 12 pages

Economics (Markets) 503 David Luong Regulation & Anti-trust Policy Assignment 12978652
ECONOMICS (MARKETS) 503Semester 2, 2005Assignment Cover SheetName: David LuongStudent ID: 12978652Tutor's Name: Mr. GurribDay & time of tutorial: Wednesday 5:30 pmDate submitted: 13 October 2005Your assignment should meet the following requirements.Please confirm this (by ticking boxes) before submitting your assignment.( Assignment is word processed and double-spacedN/A Copy of media article showing date and source is attached( Pages have been consecutively numbered and identified( An electronic copy of the assignment has been retained by me( Spell-check has been conducted and corrections made( Assignment has been appropriately referenced( Word Count 2518( Declaration below is completeAll forms of plagiarism, cheating and unauthorized collusion are regarded seriously by the University and could result in penalties including failure in the course and possible exclusion from the University. If you are in doubt, please contact your lecturer, Unit Controller, or your Course Coordinator.DeclarationExcept where I have indicated, the work I am submitting in this assignment is my own work and has not been submitted for assessment in another Unit or course. I warrant that any diskettes and/or computer files submitted as part of this assignment have been checked for viruses and reported clean.________________________________________21.0 Is Microsoft a Monopoly? 21.1 The Relevant Market 21.2 Market Share 31.3 Barriers to Entry 41.4 Availability of Substitutes 52.0 Has Microsoft Exploited its Monopoly Power? 52.1 Restrictive Licensing Agreements with Original Equipment Manufacturers (OEM) 62.2 Bundling Internet Explorer with the Windows Operating System 72.3 Bundling Windows Media Player with the Windows Operating System 72.4 Limiting Connection for Windows NT Workstations 93.0 How Microsoft's Monopoly Power Affects the Market and its Consumers 93.1 Higher Prices 103.2 Inefficient Allocation 103.3 Inhibits Technological Progress 113.4 Denial of Choice and Impairment of Quality 113.5 Deteriorates Web Security 124.0 Conclusion and Recommendation 145.0 Reference List 1.0 Is Microsoft a Monopoly?A monopoly exists when a firm is able to control to a degree the competitive environment in which all the other firms operate. The monopoly firm's actions will shape the market outcome without the consent of the other competitors (White, 1983). The relevant market in which the firm in question operates needs to be identified before it can be ascertained if that firm holds any monopoly power. After the relevant market is identified, the market share of the firm, the barriers of entry into the market, the substitutes for the product and the pricing behaviour are examined.1.1 The Relevant MarketThe relevant market in which Microsoft operates is determined to be the PC operating systems and applications market.1.2 Market ShareThe first step to determine whether a firm has...

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