Question

After reading that section of your text, consider if Microsoft make-ups such a large proportion of the personal computer operating systems market that the market should be considered no longer competitive. As of mid 2015, approximately 86% of personal computer operating systems were sold by Microsoft (Vista and multiple versions of Windows). Per your books definition of a monopolist, the existence of other operating systems make Microsoft not technically a monopolist. However, this exceptionally large share of sales in the personal computer operating system market clearly establishes Microsoft as the dominant firm in that market.

In your initial post, discuss why you think that Microsoft's current share of sales in the personal computer operating systems market is (or is not) large enough for Microsoft to set prices for operating system software as a monopolist? Also, how big of a share do you think a firm needs to have of a market before it can set prices as if it was a monopolist? Lastly, what do you think the makers of other personal computer operating systems could do to gain a larger share of sales in that market or cause Microsoft to lower the price of the personal computer operating systems that it sells?

Answer 1

a) The market share of Microsoft as per Satista shows 76% of hold as per 2019 Jan data. This also creates a market where Microsoft can turn into a monopolist to set a price on the operating systems. However, the market of operating system is where there is continuous increase in the technological aspect. It is therefore not clear and certain when one company would surpass the other in technical capability.

b) A firm should at least have a 70% and above share in the market to turn into a monopoly. That is how it can reign over its other competitors.

c) They need to make their operating system more user friendly and also market it in the same way. The number of application that is provided by Microsoft is extensive, others like Linux have limitations of the application. The more user friendly and wide application is provided by the operating system, larger is its demand.