Course Code: ECOM525 Course Title: Managerial Economics

Course Instructor: Dr. Nadeem Ahmad Bhat Academic Task No.: 02

Date of submission: 10th December, 2022 Section: Q2239

Student Name: Adarsh Singh, Shreya Kaushik,

Anmoldeep kaur Randhawa, Neetu Kumari

Student’s Roll No: 21, 22,23,24

Student’s Reg. No: 12202330, 12202333, 12202334, 12202263

Evaluation Parameters: (Parameters on which student is to be evaluated- To be mentioned by
students as specified at the time of assigning the task by the instructor)

Declaration: I declare that this Assignment is my individual work. I have not copied it from any other
student’s work or from any other source except where due acknowledgement is made explicitly in the
text, nor has any part been written for me by any other person

Evaluator’scomments (For Instructor’s use only)

General Observations Suggestions for Improvement Best part of assignment

Evaluator’s Signature and Date:

Marks Obtained:

Adarsh Singh (21) 12202330 10

Shreya Kaushik (22) 12202333 10

Anmoldeep kaur Randhawa (23) 12202334 10

Neetu Kumari (24) 12202263 10

 Summary of the case:

• Strategies used by Microsoft to leverage its monopoly position in operating systems in

Internet Browser market.
• Microsoft has monopoly in PC operating systems, Windows operating systems which are
used` in more than 80% of Intel based PC’s.
• This market has high technological barriers. Threat to Microsoft is not from new operating
systems but from alternate products such as browsers, which are new softwares that can be
used with many operating systems and can also act as another platform to which applications
can be written. This posed a threat to Windows monopoly and perhaps its long-term
existence.
• Microsoft had tried to control competition, to kill competition by any means and deprive
consumers of product choice, especially in browsers, by discouraging innovation.

Problem:

• Microsoft restricted all OEMs to remove any part of IE software or to add any other browser
in the pc in a more prominent or visible way. So, OEMs are deprived of the choices they can
make about which browser should be offered to customer.
• Microsoft has been investigated for antitrust violations, an assessment of how they are trying
to gain monopoly, strength in the computer software industry, in addition to an assessment
of the good and bad aspects of monopolies in general.

Microsoft invested money to develop, test and promote IE for free to all users.
1 In competition to Netscape browsers which was being sold for a price. They
even paid some customers to use IE instead of Netscape browser.

Microsoft put a condition to PC manufacturers to license, preinstall and

distributes IE on every Window PC. By this, they were able to distribute
2 IE on every PC by tying up IE to Windows 95, which was a monopoly
version.

This was extended to the Windows 98, successor of Window 95, misusing
their operating system monopoly to exclude competition and deprive customer
3 of free choices. They made removal of IE from Windows 98 technically more
difficult.

Solutions:

• Microsoft is a monopoly and should insulate from price competition is its huge profits.

• As Microsoft should install the base expands, its average cost per unit of software is
dropping dramatically, but it doesn't want to pass the savings on to the customer, as they
would have had to if they had true competition, which they minimized primarily by OEM
distribution of their software, which continues to this day!

• Microsoft can stop most of the piracy of its software, wherever it may be, regardless of the
laws of the countries of the world, regardless of whether it even knows about the piracy all
without filing a single lawsuit or using copy-protection schemes
Mentioning the economic concept.
 Question & Answer:

• Is Microsoft’s Market Is So Massive That It Can Create Monopoly?

✓ Microsoft Corporation has been a monopoly in pc working structures and software program
marketplace for a protracted length of time. It has been accused of violating anti-agree with
legal guidelines and the use of non-competitive practices to dominate the marketplace. The
cutting-edge marketplace proportion of Microsoft is large, thus, allowing it to stay a
monopoly withinside the working structures marketplace for decades.
✓ Microsoft has a 93% marketplace proportion regardless of a stiff opposition from different
technological companies. Competitors, which include Macintosh and Linux have competed
with Microsoft for an extended period. However, Microsoft has controlled to manipulate
the most important part of the marketplace. The declining innovativeness and creativity of
Microsoft may have unfavourable outcomes on its marketplace proportion.
✓ Microsoft behaves like a monopoly due to the fact there are some progressive competition
withinside the marketplace. It has used numerous techniques that different generation
companies have didn't execute which will manipulate and preserve the big part of its
marketplace proportion. First, it has evolved sturdy relationships with different
technological organizations to preserve its dominance.
✓ For example, it has collaborated with numerous video and audio streaming organizations
to increase its monopoly in offering multimedia content material to its consumers.
✓ Secondly, Microsoft has invested in rising generation organizations to eliminate opposition
that those organizations introduce withinside the marketplace. This has ensured that
technological improvements are in keeping with Microsoft`s plan for dominance.
✓ Thirdly, Microsoft has collaborated with numerous getting to know institutions, that have
helped keep its dominance withinside the computing device marketplace. Monopolies
generally end result from perpetuation of uncompetitive practices via way of means of
organizations or companies that save you different organizations from penetrating the
marketplace.
✓ It is hard for different organizations to collect a good-sized marketplace proportion below
winning situations due to access obstacles created via way of means of Microsoft. From a
felony and monetary perspective, Microsoft`s marketplace proportion is big sufficient for
it to act like a monopoly.
• Do you agree or disagree with Jackson?

✓ We learn from the case study that the corporation was previously accused of behaving as a
monopoly by a federal law court. Judge Jackson rejected the company's defence, claiming
that the company's business practises were hurting customers. Similarly, the judge held that
the firm was functioning as a monopoly. Jackson's decisions, in my opinion, were
justifiable. Over the previous decade, Microsoft has stifled competing businesses' growth
and driven others out of the market.
✓ The corporation has dominated the computer market by engaging in anti-competitive
behaviour. As a result, customers have been compelled to buy their services and products
since they are the most widely available on the global market.
✓ After driving out their competitors According to Jackson's claim, Microsoft's commercial
practises have stifled innovation in the computer sector. Currently, numerous innovators
have developed practical inventions that, if permitted to compete favourably in the global
market, can challenge Microsoft's ideas. Microsoft's monopoly has assured that these
technologies never reach the global market by making its consumers completely reliant on
their services and goods.

• Is Microsoft a good example of deadweight loss to its economy?

✓ In my opinion, Microsoft Corporation is a perfect illustration of deadweight loss to its

frugality. According to economists, monopoly can be considered as a dead weight loss to
its frugality when it leads to artificial failure. In this regard, Microsoft’s expansion in the
computer can be said to have created an artificial failure in computer requests.
✓ The demand for feasible operating systems and programs in the world request is high. still,
since Microsoft has sewed up this request, druggies are frequently forced to buy their
operating systems. Through this conduct, Microsoft has manipulated the demand and force
in the computer request to increase their returns. By doing so, the company has been
considered a deadweight loss to its frugality