INSTRUCTIONS:
What are the pricing and non-pricing strategies monopolies use to maximize their profits? Initial Response Thanks for your initial response to the Week 2 Discussion Question. In your post, you underscored the government’s role in securing stable economic growth through the Federal Highway Act of 1956. You also shared your valuable perspectives on a high level of economic concentration: monopoly. Economic concentration sometimes brings its fruits to society in the form of efficiency and productivity, thanks to economies of scale. Natural monopolies can use economies of scale (producing more while decreasing costs of production) and provide benefits to their consumers and the economy. Many believe that Microsoft used to be a natural monopoly, and the economy benefitted from their MS Office Suit product, which helped employees increase their productivity. That being said, many also think the European Union (EU) Competition Commissioner was right in regulating the company in the 2000s because of their monopolist position on personal computer operating systems. European regulators and their competitors at that time, like IBM, Oracle, Sun Microsystems and Red Hat, accused Microsoft of using its dominance in computer operating systems and software to lock out competitors. In order to convince the EU regulators, Microsoft opened up and shared many more of its technical secrets with the rest of the software industry and competitors in February 2008 (Lohr, 2008).