“Several years ago there were a few lawsuits contending that Microsoft was exercising illegal monopoly power when it required computer manufacturers who installed Windows to include Internet Explorer. Microsoft maintained that it was a “natural monopoly,” (see part 10.1 of the digital text; sometimes defined as an industry with such large economies of scale that a single firm producing the good is most efficient), and because of this it was operating in a manner that was best for society (most efficient).
- Do you think Microsoft was a “natural monopoly” at the time?
- Do you accept their argument? Why or why not?
- Can you name any “natural monopolies?”