Microsoft Vista Case Study
1. Introduction.
Microsoft launched Vista, new operating system at that time, on 30 January 2007, to consumers in 70 countries. Vista came up with putting manuscripts full access online, better protection on internet and powerful speeded up graphics, as mentioned in Financial Times (2007). This essay is going to state about the market structure especially in Monopoly, Duopoly and Perfect competition with relations to economic efficiency, profit margins, and about substitutes and complements products in the market.
2. Microsoft Vista as monopoly.
In economic, there are different market structures, such as Monopoly, contains single firm operating in the whole market, Duopoly, two firms in the market, Oligopoly, three or more firms in the market, …show more content…
When the market price should be P2, Microsoft is selling Vista at P1. Therefore, Microsoft is having more producer surplus and customers are losing consumer surplus. The wedge of smaller output at higher price is creating Deadweight loss (triangle ABC). In Figure 1.2, by allowing others firms in the market, market prize will become P3, and there will no longer have Deadweight loss, the loss to society. Only the whole market will make its own price and quantity. This would lead Microsoft quit as a monopoly and be a price taker, no longer price maker. Microsoft’s price margin will be affected, and then Microsoft will no longer enjoy the Vista market. According to the above conditions, Microsoft would not invest tons of money or would stop investing to develop Vista, as their power on the market is shrinking and cannot play on price and demand …show more content…
At least monopolists can differentiated and make the products as unique to attack customers which lead some influences over price. Therefore, every firm in the retail market do their best to survive for their own and to serve the customers. If customer is unsatisfied, they will change to another firm. According to price taker condition, firms cannot rule over price. For retail market, even they have thinner profit margin compare to monopolistic market, they are still earning certain amount of profits (Figure 3.1), which will in turn attract new
Microsoft launched Vista, new operating system at that time, on 30 January 2007, to consumers in 70 countries. Vista came up with putting manuscripts full access online, better protection on internet and powerful speeded up graphics, as mentioned in Financial Times (2007). This essay is going to state about the market structure especially in Monopoly, Duopoly and Perfect competition with relations to economic efficiency, profit margins, and about substitutes and complements products in the market.
2. Microsoft Vista as monopoly.
In economic, there are different market structures, such as Monopoly, contains single firm operating in the whole market, Duopoly, two firms in the market, Oligopoly, three or more firms in the market, …show more content…
When the market price should be P2, Microsoft is selling Vista at P1. Therefore, Microsoft is having more producer surplus and customers are losing consumer surplus. The wedge of smaller output at higher price is creating Deadweight loss (triangle ABC). In Figure 1.2, by allowing others firms in the market, market prize will become P3, and there will no longer have Deadweight loss, the loss to society. Only the whole market will make its own price and quantity. This would lead Microsoft quit as a monopoly and be a price taker, no longer price maker. Microsoft’s price margin will be affected, and then Microsoft will no longer enjoy the Vista market. According to the above conditions, Microsoft would not invest tons of money or would stop investing to develop Vista, as their power on the market is shrinking and cannot play on price and demand …show more content…
At least monopolists can differentiated and make the products as unique to attack customers which lead some influences over price. Therefore, every firm in the retail market do their best to survive for their own and to serve the customers. If customer is unsatisfied, they will change to another firm. According to price taker condition, firms cannot rule over price. For retail market, even they have thinner profit margin compare to monopolistic market, they are still earning certain amount of profits (Figure 3.1), which will in turn attract new