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    Microsoft's Current Market Conditions

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    Analyze the current market conditions of Microsoft Corporation. Address the following topics in your analysis:
    a. Market structure
    b. Impact of new companies entering the market
    c. Prices
    d. Technology
    e. Productivity (consider the law of diminishing marginal productivity)
    f. Cost structure
    1) Wages and benefits
    2) Fixed and variable costs
    g. Price elasticity of demand
    h. Competitors
    i. Supply and demand analysis
    j. Impact of government regulations

    Please include your references.


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    Microsoft Corporation

    Market Structure

    Microsoft Corporation is a fully monopoly market which covers the 90% of the total software market. The main operation of the company is to generate, develop, manufacture, License and support software product for different computing devices. Due to its monopoly market the company produces a level of output where its market revenue equals its market cost. Company non pricing strategies are licensing, research and development and branding of its product. Within few years many more companies has entered into the market and this is the reason the market structure looks out to be in the monopolistic competitive mode. The level of completion in the market is growing with new firms entering.

    Impact of new companies entering the market

    With more and more companies entering into the market the structure of the market is changing from monopoly of Microsoft to the monopolistic competition. Due to this the level of competition in the market has increased and the price of the product is mainly determined by the market forces. Due to the competitive pressures is resulted result in decreased sales volumes, price reductions, and/or increased operating costs, such as for marketing and sales incentives, resulting in lower revenue, gross margins, and operating income for the ...

    Solution Summary

    This solution discusses Microsoft's current market conditions.