Economics the Partnership Between Microsoft and Apple Research Paper

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Economics

The Partnership between Microsoft and Apple after Microsoft had faced tough anti-trust scrutiny is an example of monopolistic competition. Microsoft and Apple produce products that are not perfect substitutes of each other. In fact, the products are perceived to be different to all other brands products. Microsoft's products include Microsoft Office and the IE products. Apple on the other hand had MAC operating system (Kawamoto, Heskett & Ricciuti, 1997). Microsoft had to preserve competiveness in the industry to comply with antitrust laws and to ensure that there was no unfair competition in this industry as to limit consumers from making informed choices on what kind of products they should go for and at what prices. Microsoft wanted to develop and ship future versions of its MS Office, internet explorer, and development tools to Macintosh. In the event that Apple did not survive Microsoft would not have kept antitrust charges at bay because Apple was the only alternative to Microsoft Windows and Microsoft Intel (Kawamoto, Heskett & Ricciuti, 1997).

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The only barrier to entry into Bulls Eye's market is the fact that it is the only department store that sells discounted clothing, shoes, and household items in the Show Low neighborhood. Otherwise Walmart and Target also sells similar products ad discounted prices but in different geographical location. In fact, the nearest discount retailer is Target that operates approximately 49 miles away in Eager. Bulls Eye basically enjoys market power in this market niche because it is the only retail store that sells clothing, shoes, and household items at discounted prices. Despite the fact that Bulls Eye is a monopoly in this neighbored it still suffers losses. This is not a peculiarity because monopolies also suffer losses. Being a monopoly in this niche, any proprietor would….....

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