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In what ways might the behavior of Microsoft, increasingly becoming a monopoly in the software and operating systems market, be deemed to be: (i) against the public interest
In what ways might the behavior of Microsoft, increasingly becoming a monopoly in the software and operating systems market, be deemed to be:
(i) against the public interest.
(ii) in the public interest.
2.) Describe the positive and negative effects of monopoly in Malaysia.
Expert Solution
1) The correct option is:
(i) against the public interest
The creation of an unregulated monopoly might lead to the exploitation of the consumer in the long run. Over-dependence of consumers on Microsoft products, in the long run, might lead to the creation of an unregulated monopoly in the long run.
2. Monopolies are not always bad. Some of the advantages of monopolies are:
i. They are considered highly competitive and efficient in terms of operation.
ii. Monopolies lead to supernormal profits and induce investments in research and developments and lead to innovations. In the long run, this would lead to better products at lower cost.
iii. Monopolies lead to economies of scale and hence reduction in the cost of production in the long run.
The disadvantages of the monopolies are:
i. Monopolies are often related to consumer exploitation in terms of lower output and higher prices.
ii. They do not operate on the level of economic efficiency.
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