“Several years ago there were a few lawsuits contending that Microsoft was exercising illegal monopoly power when it required computer manufacturers…
“Several years ago there were a few lawsuits contending that Microsoft was exercising illegal monopoly power when it required computer manufacturers who installed Windows to include Internet Explorer. Microsoft maintained that it was a “natural monopoly,” (see part 10.1 of the digital text; sometimes defined as an industry with such large economies of scale that a single firm producing the good is most efficient), and because of this it was operating in a manner that was best for society (most efficient). Do you think Microsoft was a “natural monopoly” at the time? Do you accept their argument? Why or why not? Can you name any “natural monopolies?” Explain in detail and use examples along with resources.
Microsoft as a natural monopolyThe software industry makes Microsoft a natural monopoly as with increased output, the averagetotal costs continually decline. Microsoft used predatory pricing to…
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