Microsoft Antitrust Case
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Information technology has become one of the major driving forces of the global economy, in which application tools of the information age have been used to increase efficiency and productivity. Microsoft has been recognized as one of the primary companies responsible for introducing personal computing and software to consumers.
Personal computing has become ubiquitous and necessity in maintaining effective communication. Since the introductions of windows in 1985, Microsoft has become an industry giant in software and computing industry. However, through most of its recent history Microsoft has been subject to continual government investigation which finally led to the United States suit against Microsoft for violation of the Sherman Antitrust Act of 1980.
In the classical economic definition, a monopoly is viewed as a firm not operating in perfect competition and displaying market power, which allows the firm to affect market prices through its actions. Generally, a firm that demonstrate monopoly power faces a downward-sloping demand curve and will charge a higher price for their products while producing less quantity than the market equilibrium dictates.
As a result, a market failure exists and an economic and social loss to society occurs. In perfect competition, there are four main assumptions about the operation of the market that includes a high number of buyers and sellers, goods from competing sellers must be homogenous, free entry and exit of firms, and buyers and sellers must be fully informed. The market equilibrium in perfect competition provides the exact price and quantity agreed upon through the market by buyers and sellers...