In many ways, Microsoft's point that it was a natural monopoly because of its browser and operating system being the most efficient and cost-effective solution for the market is well taken. Because of the demand for their system, there was a huge economy of scale, making PCs far less expensive. In addition, many monopolies are deadweight loss to society by taking more than giving -- Microsoft's investment and research/development continue to benefit society, and have, in fact, lowered the demand curve so that more people can afford personal computers. This has advanced the market by allowing the platform to become smaller and more efficient in the use of Smartphones and Tablets (Tutor2U, 2012; McKenzie & Shughart, 1998).
Monopolies are not always bad for society, it depends on the product. For instance, if the cost of production drops as the amount of production increases there is a benefit to the economy of scale and prices are reduced, availability increased, and society benefits. For example, power or gas companies that find excess are able to price based more on market needs than simply a high, monopolistic price. Creating competition might be greater in these cases, because the utilities...
This also provides standardization in that industry so that ancillary products and services can work better and more efficiently. The more efficient the industry, the better for the consumer in the long-run and the more the utility company is willing to expand its area for customers. This monopolization has government oversight as well so that there at least is a process if the companies wish to raise prices. The market, too, expands through exploration and research and development, benefiting consumers (Foldvary, 1999).
REFERENCES
Department of Justice. (2012). United States v. Microsoft Corporation. USDJ Antitrust Division. Retrieved from: http://www.justice.gov/atr/cases/ms_index.htm
Foldvary, F. (1999). Natural Monopolies. The Progress Report. Retrieved from: http://www.progress.org/fold74.htm
McKenzie, R. And Shughart, W. (1998). Is Microsoft a Monopolist? The Independent Institute. Retrieved from: http://www.independent.org/publications/tir/article.asp?a=322
Tutor2U. (2012). Monopoly and Economic Efficiency. Retrieved from: http://tutor2u.net / economics/revision-notes/a2-micro-monopoly-economic-efficiency.html
REFERENCES
Department of Justice. (2012). United States v. Microsoft Corporation. USDJ Antitrust Division. Retrieved from: http://www.justice.gov/atr/cases/ms_index.htm
Foldvary, F. (1999). Natural Monopolies. The Progress Report. Retrieved from: http://www.progress.org/fold74.htm
McKenzie, R. And Shughart, W. (1998). Is Microsoft a Monopolist? The Independent Institute. Retrieved from: http://www.independent.org/publications/tir/article.asp?a=322
Tutor2U. (2012). Monopoly and Economic Efficiency. Retrieved from: http://tutor2u.net / economics/revision-notes/a2-micro-monopoly-economic-efficiency.html
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