Question

a) TV commercials are swamped with prescription drugs for anxiety, depression, impotence, and heartburn. Oftentimes, a drug company would try to get consumers to ask their doctors to switch to their products. This has something to do with the patent. The patent on the old drug runs out that year, soon the price will go down as other companies can produce the same drug. The new ads that ask consumers to switch is a way of building loyalty to a new, monopolized brand at a time when the old monopoly will soon disappear.    Now: Microsoftintroduces new operating systems every three or four years. How is this behavior similar toor different from the drugs case? State two similarities and two differences.

250 words required

Answer 1

Similarities :

1) Microsoft introduces new operating system , at that time it has a monopoly in the market just like a drug company, other companies require time to copy the same operating system . It has a monopoly just like the drug company . It has the sole ability to produce that operating system , no other company can produce it .

2) Microsoft tries to built a consumer confidence just like the drug company so that consumers do not opt for other operating systems and always have the urge to buy newer versions of microsoft operating system even if it is costlier .

Differences :

1) A drug company cannot launch new monopolized brand every few years since it requires lot of investment in reasrch and development and is a time consuming process . Also the patent lasts longer of the drug company which ensures high profits for longer period of time . For microsoft , other companies can produce the same system sooner and so micrsoft has to introduce advanced versions of operating system every 3 to 4 years to have the monopoly advantage .

2) Microsoft introduces new operating system not only for its own benefit regarding monopoly power but also to stay in the competition . Other competitors if launch their operating systems which are better than microsoft then it will lose its market share .