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The biggest difference between Microsoft and software retailers is the market structure in which they operate. Microsoft acts as a monopoly, while companies like Circuit City and Best Buy operate in a competitive market, competing with each other and with hundreds of other stores. For simplicity, let's think of Circuit City as being a representative store. Suppose Microsoft sells the basic version of Vista to retailers such as Circuit City for $190 per copy. If Microsoft were to raise that price to $290, which of the following would happen?

Microeconomics, Economics

  • Category:- Microeconomics
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