In today's competitive market, the government plays a very vital role in the success of our economy. The government serves the checks and balances as while many companies like Microsoft strive to keep their competitive advantages. It is obvious Microsoft's innovation has been leading the way in software technology. Since competing companies have not been able to keep up Microsoft's innovation, 19 states (represented by United States) have filed an antitrust violation against the company. In this essay, we will discuss the United States vs. Microsoft antitrust case from a student perspective.
In order to analyze the case, we must identify the role of government in a market based economy. The government enforces property rights, protecting property and possessions from theft and any problem associated with market failure (O'Sullivan, Sheffrin pg 55). Without the government fulfilling this responsibility, our economic market would crash because there would be a lack of stability. "The government has two additional roles to play: Establishing rules for exchange in markets and using its police power to enforce the rules, Reducing economic uncertainty and providing for people who are unlucky- because of job losses, poor health, bad luck, or other circumstances" (O'Sullivan, Sheffrin pg 55-56). When analyzing the Microsoft case, you must have a clear understanding of the current trends of macro and microeconomics. "Microeconomics is the study of the choices made by households, firms, and government and how these choices affect the markets for goods and services"( O'Sullivan, Sheffrin pg 12). "Macroeconomics is the study of the nation's economy as a whole" (O'Sullivan, Sheffrin pg 14). Keeping the micro and macroeconomics in mind, it is easier to understand the current trends. "Raising taxes on high-income (and productive) people kills innovation. Growing government programs to redistribute wealth also... [continues]
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