Netscape, Which Once Controlled More Than 80 Percent of the Market

question 4

Multiple Choice

Netscape, which once controlled more than 80 percent of the market share in Web browsers, lost its dominant position when customers migrated to Internet Explorer, Microsoft's Web browser. Internet Explorer was easy to install and had no significant differences in terms of usability. This example serves to illustrate that:

• A) fast-following smaller firms are always ready with newer and possibly superior products.
• B) customers of technology companies are becoming increasingly savvy and more demanding.
• C) the open source nature of technology ensures that no firm can expect to monopolize a market.
• D) firms need to employ increasingly stringent intellectual property norms to guard against infringements from smaller, competitive rivals.
• E) firms with low switching costs can sometimes be rapidly overtaken by strong rivals with additional competitive advantages.

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Definitions:

Consumption

The process by which individuals or households use goods and services to fulfill their needs and wants.

Income

Money that an individual or business receives, typically as a return on investment, labor, or sale of goods and services.

Interest Rate

The fraction of a loan incurred as interest by the borrower, often represented as an annual percentage of the remaining loan balance.

Savings

The portion of income not spent on current consumption, typically set aside for future use or investment.