Microsoft has integrated many components into its Windows operating systems, such as a web browser, media player, etc. How might this be an example of nonprice competition?
What will be an ideal response?
There are a number of possible answers, including enhancing the attributes of the product (increasing demand), increasing switching costs to increase customer loyalty (reduce elasticity), etc.
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The monopolist is always constrained by:
A. the amount demanders are willing to buy at any given price. B. his production capacity. C. the barriers to entry. D. government regulation.
An adverse supply shock causes output to
a. rise. To counter this a central bank would increase the money supply. b. rise. To counter this a central bank would decrease the money supply. c. fall. To counter this a central bank would increase the money supply. d. fall. To counter this a central bank would decrease the money supply.
According to the Coase Theorem, externality problems:
A. Do not exist in reality, because all costs and benefits are internal to firms B. Can be solved through private negotiations without the need for government intervention C. Must only be resolved by government action, through either taxes or subsidies D. Can never be resolved adequately because one party always gains while the other loses
According to New Keynesian economists
A. fluctuations in output are primarily caused by supply shocks. B. the amount of time it takes firms to adjust prices is less than six months. C. activist policy has little effect on real Gross Domestic Product (GDP). D. activist policy can be used to minimize variations in real Gross Domestic Product (GDP).