One defense Microsoft can use to argue that it does not have monopoly power in the market for operating systems,is to show that
A) demand for operating systems is highly elastic.
B) many other commodities have higher income elasticities of demand than operating systems.
C) the cross elasticity of demand between Microsoft's operating system and other operating systems is large and positive.
D) many of its competitors' products are complements for its service.

Question

Quizplus · Accepted Answer

The cross elasticity of demand measures the responsiveness of demand for one product to a change in the price of a different product. If there are many substitutes available, then the cross elasticity of demand would be high and positive, indicating that consumers are willing to switch to other products if Microsoft raises its prices. This would weaken the argument that Microsoft has monopoly power in the market for operating systems.

One Defense Microsoft Can Use to Argue That It Does