Oracle, a Firm That Sells Commercial ERP and Database Products

question 12

Multiple Choice

Oracle, a firm that sells commercial ERP and database products, provides Linux for free, selling high-margin Linux support contracts for as much as five hundred thousand dollars. Oracle's motivation for this lies in:

• A) accelerating the shift of open source software towards a proprietary regime.
• B) using open source software to fuel sales of hardware.
• C) impoverishing other open source developers and furthering its own proprietary offerings.
• D) using open source software to wean customers away from competitors.
• E) protecting itself from the risks of distributing code while unaware of legal implications.

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Definitions:

Public Good

A good or service offered to society's members at no cost, sponsored by either a private entity or the government with no intent of making a profit.

Marginal Cost

Marginal cost is the change in total production cost that comes from making or producing one additional unit of a good or service.

Public Good

A product or service that is non-excludable and non-rivalrous, meaning it can be used by many people without depleting the resource or preventing others from using it.

Demand-Side Market Failure

A situation where the demand curve does not reflect consumers' full willingness to pay for a good or service, often due to externalities or public goods.