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Monopoly Essay Question 1
"Having been found guilty, in April 2000, of abusing its monopoly, Microsoft, the software giant was ordered to be broken in two."
- Economist 7 Nov 2002
a) Why do monopolies exist? [ 10 ]
b) What are the relative merits or demerits of breaking up a monopoly like Microsoft? [ 15 ]

Suggested essay outline:
Part (a)
INTRODUCTION
1. (i) Define monopoly

Spectrum of Market Structures:

Definition: Most extreme form of imperfect market with little or no competition & firm supplies a major part of industry output.


Definition: Most extreme form of imperfect market with little or no competition & firm supplies a major part of industry output.

(ii) State the characteristics of a monopolist
· There are no close substitutes
· There is presence of barriers to entry.
· Demand is likely to be price inelastic

BODY
2. Why monopolies exist?

- EOS

In some industries, high overheads mean that the market size......

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Approximate Word Count: 576
Approximate Pages: 3 (250 words per double-spaced page)

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