Question

In: Economics

2. There are so many companies having websites to sell their products. However, not every company...

2. There are so many companies having websites to sell their products. However, not every company is successful in online retail. In your opinion, what are the common characteristics of products which can be sold successfully in online retail? Please provide at least one example and explain your answer.

3. Microsoft has been a giant in the software industry. Can we define Microsoft as a monopoly? Please explain. In addition, whether the Learner Index works well to define the market power for Microsoft in the software industry? Explain your answer.

Solutions

Expert Solution

The answer of the first question may be as every company doesn't updates their products and prices they wouldn't get success in online retail. Further successful delivery and return facility matters for online retail businesses. Those who achieve the goals of prompt delivery with return facilities would succeed more. Again discrimination in prices for the same product also matters. Some of the giant online retailers can get benefit of that in their business.

Answering the second question Microsoft has monopoly power in software business because they occupied more than 90% of software business. As Microsoft is a giant software firm it decides its product price independently and it enjoys monopoly not only software market sharing butaslo price determination. As we know Learner's index shows the monopoly power and its value is equals to the reprocal of elasticity of demand, Microsoft company has lower price elasticity of demand because of monopoly and that's why its product price is above the competitive price.

Rahul Sunny answered 2 years ago
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