In Defending Itself Against the Government's Antitrust Action, Microsoft

question 48

Multiple Choice

In defending itself against the government's antitrust action, Microsoft

• A)argued that its high market share would rapidly deteriorate unless the firm continued to innovate
• B)argued that it did not have a high market share
• C)admitted that it had used tying contracts
• D)offered to sign a consent decree
• E)offered to split itself into three separate firms

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Definitions:

Competitive Firm

A business that operates in a market where it has multiple competitors, and no single firm can influence the market price of goods or services.

Short Run

A time period in economics where at least one input is fixed, restricting the ability to adjust production levels fully.

Long Run

A timeframe during which all production factors and expenses can change, permitting adjustments to all inputs.

Allocative Efficiency

A state of the economy in which production is in accordance with consumer preferences; every good or service is produced up to the point where the last unit provides a utility to consumers equal to the cost of producing it.