Question

CHS 25-26 Economics EOY
Jose Torres
16.


Directions

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 portions (two):

1) "IBM's inability to gain widespread developer support for its OS/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."
- Why: shows network effects and barriers to entry — developers and complementary products concentrate on the dominant platform, making it hard for rivals to compete.

2) "For that reason, in 1996 IBM stopped trying to convince ISVs to write for OS/2 Warp."
- Why: shows how a monopoly’s market position can deter competition and cause rivals to exit or abandon efforts, reinforcing the monopolist’s dominance.