Question

Select all the correct answers.

Which portions of the U.S. Supreme Court's Findings in U.S. v Microsoft best describe how monopolies work?

Select TWO.

IBM's inability to gain widespread developer support for its OS [Operating System]/2 Warp operating system to develop applications for OS/2 and Despite these efforts, IBM could obtain neither significant market share nor ISV support for OS/2 Warp. Thus, although at its peak OS/2 ran approximately 2,500 applications and had 10% of the market for Intel-compatible PC operating systems, For that reason, in 1996 IBM stopped trying to convince ISVs to write for OS/2 Warp. The fact that IBM no longer tries to compete with Windows is evidenced by the fact that it prices OS/2 Warp at about two-and-one-half times the price of Windows 98.

U.S. V. Microsoft, Civil Action No. 98-1232, U.S. Department of Justice, 1999.

Answer 1

Selected answers (best describe how monopolies work):

1) "IBM's inability to gain widespread developer support for its OS/2 Warp operating system to develop applications for OS/2 ... Despite these efforts, IBM could obtain neither significant market share nor ISV support for OS/2 Warp."

2) "For that reason, in 1996 IBM stopped trying to convince ISVs to write for OS/2 Warp."

Why: together these show the key monopoly dynamics the Court emphasized — network effects/tipping (developers concentrate on the dominant platform) and the resulting foreclosure/exit of rivals (competitors stop trying because they cannot attract developer support or market share).