SECTION A:

Strategies Used by Microsoft to Leverage its Monopoly Position in Operating Systems to Internet Browser Markets

MICROSOFT

QUESTION 1

1.1 With reference to the case study discuss the high barriers to entry in the market for PC operating Systems.

1.2 Critically evaluate the pattern of potentially anti-competitive activities by Microsoft towards its competitors. Do you think that the government should always try to eliminate monopoly power? Substantiate your solution with facts in the case study.

QUESTION TWO

2.1 Describe and explain how the internet browsers pose a competitive threat to Microsoft's potential operating system monopoly.

2.2 "Our business model works even if all internet software is free ....... We are still selling operating systems. What does Netscape's business model look like? Not very good."

Critically evaluate how the anti-competitive behaviour of Microsoft hinders innovation or development of advanced technological products.

SECTION B

QUESTION 3

South Africa is one of the largest economies in Africa and is categorised as an upper-middle income country by the World Bank (2014), with a Gross National Income (GNI) per Capita in 2014 of USD7,460. It has high unemployment levels and very high levels of income inequality. These income inequalities are a reflection of South Africa's political history of ‘apartheid', which maintained economic and political power for the white minority and systematically disadvantaged the black population. Since the transition to a democratically elected government in 1994, economic growth has occurred, but income inequalities have in fact become worse.

With reference to the above;

3.1 Explain ANY THREE(3) types of unemployment being experienced in South Africa.

3.2.1 Calculate the unemployment rate according to the strict definition.

3.2.2 Compute the unemployment rate according to the broad definition.

3.2.3 Find the labour participation rate.

3.3 Discuss the strategies which the government of your country could use to reduce income inequality and unemployment in or among the following;

3.3.1 Depressed industries

3.3.2 Unskilled workers

3.3.3 Depressed geographical regions

3.3.4 Teenagers

QUESTION 4:

Consider a monopolist where the market demand curve for the produce is given by P = 520 - 2Q.

This monopolist has marginal costs that can be expressed as MC = 100 + 2Q and total costs that can be expressed as TC = 100Q + Q2 + 50.

4.1 Given the above information, what is this monopolist's profit maximising price and output if it charges a single price?
4.2 Given the above information, calculate the single price monopolist's profit.
4.3 At the profit maximising quantity, what is this monopolist's average total cost of production (ATC)?
4.4 At the profit maximizing quantity, what is the profit per unit for this single price monopolist?
4.5 Critically evaluate whether government corporations such as ESKOM should be privatised.

Assignment Guidelines

• Word Limit: Your assignment must not exceed 6000 words. Your assignment should include a Table of Contents page.

• References - At least 10 sources of reference (textbooks, journals, press reports, internet, etc) must be included in your list of references. The Harvard system of referencing must be used.

• Ensure that readings are not merely reproduced in the assignment without original critical comments and views.

• It is imperative that learners proofread and edit their assignment prior to submitting it. Assignments must be free from errors and of a professional standard.