16.1 Monopoly and How it Arises

MyEconLab Concept Video

Microsoft faces almost no competition in the market for PC operating systems. Does the absence of competition result in buyers paying too high a price for Windows? You will find the answer in this chapter.

The market for PC operating systems is an example of monopoly, a market in which one firm sells a good or service that has no close substitutes and in which a barrier to entry prevents competition from new firms.

No Close Substitute

If a good has a close substitute, even though only one firm produces it, that firm effectively faces competition from ...

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