Is Microsoft really a Monopoly Term Paper Example | Topics and Well Written Essays - 3000 words

Is Microsoft really a Monopoly - Term Paper Example Monopoly refers to a market where a particular individual or enterprise has sufficient control over a product or service and has the controlling power where it can decide the others who can have access to the product. In short, it is a market where one firm makes up for the entire market and it is the price setter for the price in that particular market. In these types of markets, the competition for the goods and services is normally less and the numbers of competitors within these markets are less. Substitute good and services are generally not available in these markets. These markets generally are comprised of a firm which takes up a greater share of the market when compared to others like in the case of perfect competition. A Monopoly is different from a monopsony where there is normally just one buyer of the products and services. This normally categorizes as an imperfect market. Also, the monopoly should be differentiated from a cartel, where a number of providers act together to coordinate the services and prices of the goods. Â  The word monopoly was firstly used in Aristotle’s politics (Baker, 2001). After understanding what a monopoly refers to it is also essential to understand a monopolistic market. This is different from monopoly and is useful to understand to check if the company falls into this category (Baker, 2001). Monopolistic markets are very common and can be considered in various aspects. There are a number of different sectors that fall into these markets. These markets are typically where there are a number of producers and many consumers in a given market, and the consumers feel that there are no price differences among the prices of the various competitors. Also, the barrier to entry and exit is very less within these markets and the producers have control over the prices. These markets in certain aspects are similar to perfect competition markets with the difference of not having heterogeneous products. Also in these types of competition, the product differentiation is very low. Here firms making profits in the short run normally break even in the long run as the demand will decrease and average cost normally increases (Baker, 2001). Â