Some Economists Argue That Microsoft Become a Monopoly in the Market

question 240

Multiple Choice

Some economists argue that Microsoft become a monopoly in the market for computer software by developing MS-DOS, an operating system used for the first IBM personal computers. The more people who used MS-DOS-based programs, the greater the usefulness of a using a computer with an MS-DOS operating system. The explanation for Microsoft's monopoly is

• A) the development of new technology that other firms could not copy.
• B) control of a key resource which, in this case, is the MS-DOS operating system.
• C) network externalities.
• D) patents Microsoft obtained when it developed the MS-DOS operating system.

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Definitions:

Short Run Equilibrium

A situation in economics where demand and supply are balanced at current prices within a short timeframe.

Contractionary Gap

A situation where the real GDP is lower than the potential GDP at full employment, indicating underutilized economic resources.

Expansionary Gap

An economic situation where the actual output exceeds the potential output, often leading to inflation.

Nominal Value of Output

The gross value of all goods and services produced, measured using current prices without adjusting for inflation.