Just so you know...
You say this...
It is commonplace for a company that dominates a market to out-price it's competitors to prevent them getting a foot in the door of the market. Another example would be how British Airways priced Laker out of business. It's how monopolies remain monopolies. It's called a "barrier of entry" and is one of Porter's "5 Forces" if you're interested in business strategy theory.
Then you say this...
A monopoly is where a single producer controls so much of the market that they effectively have total control. It has NOTHING to do with the nature of the product, the price, the day of the week or the colour of the CEO's beard.
In the first qoute you say "dominates a market to out-price it's competitors to prevent" ..
But then you later say this "NOTHING to do with the nature of the product, the price, the day of the week or the colour of the CEO's beard. "
I don't even have to respond to that idiotism... your doing well yourself.
I don't think you read my post properly, and should go back and read it again. The first quote you've used is where I was discussing typical behaviour of monopolies. The second quote is where I was clearing up your misconception of the DEFINITION of a monopoly.
Let me restate it in clearer terms:
A monopoly will commonly lower it's prices in order to price it's competitors out of the market. However, THIS IS NOT THE DEFINITION OF A MONOPOLY. The name "monopoly" is based rather obviously on "mono", meaning "one", and not on any notion of price.
For example, I could choose to start selling llama-flavoured jelly. If no-one else made it, then I would be a monopoly. It would not matter if I sold it at a loss, or at a great profit. I WOULD STILL BE A MONOPOLY.
Of course, my business tactic would be to sell at a high price until a competitor tried to enter the market and undercut me. Then, I would slash prices and spend a fortune on advertising until the competitor went bust, upon which I'd yank the prices up again.
The pricing strategy would
not DEFINE me as being a monopoly, it would be an EFFECT of me being a monopoly.
You can't really use Apple OS (or Linux) to play games, so for the PC Gamer, Microsoft has a monopoly.
Was it Microsofts fault that game programmers choose their system to write the game programs for... by the way.. you can [if I remember right] play Quake, far Cry, and some other good ones on Linux...some programmers are getting smarter in realizing the fact that the games play just as well if not better on Linux...from what I've heard in other forums.
But that was Microsofts fault.
Fault has nothing to do with it. The fact is that the majority of games will only run on Windows, so that if you want to play most games, you need to buy Windows - and therefore Windows has a monopoly. Whether this was Microsoft's intention is no way relevant to whether or not the monopoly exists.
Err, how does the cost of the product in any determine whether the vendor is a monopoly?
will, over a period of time, average to be higher than if there was effective competition
My example of the $99, was that after how many years of being dominate, they are giving pretty good for the price in comparison to Apple... but then again, you saying "over a period of time"...just proves what you know about business strategies... in comparison to what i was trying to say about pricing.
Hmm, I'd suggest that maybe we should be thinking of it the other way around. How is it that Microsoft, which shifts many more copies of Windows than Apple does of it's OS, still charge more? You'd think the development costs would be spread over a far larger number of copies, and so should result in a cheaper product, not a more expensive one?
Say it costs £1bn to develop an operating system (figure plucked out of the air for example). If Microsoft sell 100 million copies, and Apple sell 10 million, then then the develop cost per product is £10 vs £100. assuming the cost of manufacturing the disk and distribution is the same, you'd expect Windows to be £90 cheaper, yes? But it isn't. This suggests a number of possibilities:
1. The development cost of Windows is
orders of magnitude higher (seems unlikely to me)
2. Apple are selling their product with a low profit margin (or even at a loss) in order to gain market share.
3. Microsoft are charging with a huge profit margin to capitalise on thier market dominance.
If Microsoft aren't creaming the market, how come Bill Gates is the world's richest man?
Just because it's not an essential product, doesn't mean that the producer isn't a monopoly! Where did you get that idea?
Give it up!!!
My point was....if you think it's a monopoly.....DON'T BUY IT!!!!!!!!!! ...IT'S NOT ESSENTIAL!!!!!!!
They didn't force you to buy it... SO HOW CAN IT BE A MONOPOLY!!!!!!!!
I didn't need it to drive my car...DID I????????
I didn't need it to work...DID I??????????
You're doing it again. Why do you think you must be forced to buy a product for it to be a monopoly? Where did you get this notion?
Back to my example of llama-flavoured jelly: it would certainly not be an essential product, but it would still be a monopoly.
To illustrate my point:
http://dictionary.reference.com/browse/monopoly
You will note that in the main definition it does not mention:
1. Whether the commodity or service is essential
2. Price
3. CEO's beard colour
So, your continual assertion that "unless it's an essential product that it cannot be an monopoly" (paraphrased (*)) is false.
(*) your actual post was "They didn't force you to buy it... SO HOW CAN IT BE A MONOPOLY!!!!!!!!", which I assume was a rhetorical question designed to illustrate that it couldn't be a monpoly because you weren't forced to buy it.
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