Microsoft holds patents on Windows, but another source of its monopoly power identified in the book is:
A) the network effects associated with the standards set by Windows.
B) its willingness to use catalog sales as its primary form of retail sales.
C) its exclusive franchise from the government.
D) its restricted ownership of silica, the principle ingredient in manufacturing computer chips.

Question

Quizplus · Accepted Answer

The network effects associated with the standards set by Windows play a significant role in Microsoft's monopoly power. Windows has become the dominant operating system because it has established a large network of complementary products and services that are dependent on it, making it difficult for competitors to enter the market. By controlling the standard, Microsoft has the power to dictate the terms of business to other companies, creating barriers to entry that protect their dominant market position.

Microsoft Holds Patents on Windows, but Another Source of Its