Microsoft's Windows product generated monopoly power by exploiting network externalities.

Question

Quizplus · Accepted Answer

Network externalities exist when the value of a product or service increases as more people use it. This was the case with Microsoft's Windows product, as more users meant more software developers would create applications for the Windows platform, which in turn made Windows more valuable to users. This cycle created a self-reinforcing monopoly power, as Windows dominated the market due to network effects.

Microsoft's Windows Product Generated Monopoly Power by Exploiting Network Externalities