Elasticity of Sales, Price Elasticity of Demand, Income Elasticity, Revenue and Cost, Profit maximisation and Cost minimisation

This document discusses the concepts of Elasticity of Sales, Price Elasticity of Demand, Income Elasticity, Revenue and Cost, and Profit maximisation and Cost minimisation. It provides explanations, equations, and calculations for each concept. The document also includes a table and a graph to illustrate the concepts.

STUDENTNAME: LABLU HUSSAIN
STUDENT ID: 1303804
MODULE TITLE: MANAGEMENT ECONOMICS
Module Lecturer’s Name; Ravshonbek Otojanov
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Table of Contents
Part A.........................................................................................................................................3
(a) Elasticity of Sales.................................................................................................................3
(b) Price elasticity of demand..................................................................................................4
(c) Income Elasticity..................................................................................................................5
(d) Revenue and Cost.................................................................................................................6
(e) Profit maximisation and Cost minimisation.........................................................................8
(F) Intuitive Analysis...............................................................................................................10
Part B........................................................................................................................................11
a. Brief history of the international company Microsoft..........................................................11
b. Discussion of the nature of the market structure of Microsoft.............................................12
c. Nature of the market to which Microsoft belongs in the history..........................................14
d. Discussion about the characteristic of the past market structure of Microsoft....................15
e. Degree of government intervention needed in present form of market of Microsoft..........17
Reference List..........................................................................................................................18
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Part A
(a) Elasticity of Sales
Population Elasticity of sales can be defined as the responsiveness to sales due to change in
population. In other words it means that due to increase or decrease in population to what
extent and how sales is affected (Love,2013, p.125).
Here
ἐs= Elasticity of sales
S= Sales
P= Population
dS= change in sales
dP= change in population
ἐ s=dS /dP× P/S
As given:
ἐs= 0.8
Therefore
0.8= (dS/ (140000-130000))×(130000/S)
0.8= (dS/10000)×(130000/S)
0.8= (dS / 1) × (13/S)
0.8/13= (dS/S)
dS/S= 0.0615
Therefore estimated percentage change in sales would be,
⇒0.615×100=6.1538%.
Now if the population increases by 10000,
The sale is expected to rise by:
⇒(6.1538/100)10000
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⇒ 615.384 units.
(b) Price elasticity of demand
Price elasticity of demand is the responsiveness of price change on quantity or it can be
written as change in quantity demanded due to 1 unit change in price.
Here in this case
P0– Initial Price
Pf– Final Price
P0=7.50
Pf = 8.50
ἐp=0.85
ἐp = (dq/q)/(dp/p)
ἐp = dq/dp×p/q
⇒ ἐp = dq/(Pf –P0)×(7.50/q)
⇒ἐp = dq/(8.50 –7.50)×(7.50/q)
⇒ -0.85= dq/q×7.50
⇒ dq/q=-(0.85/7.50)
⇒ dq/q= -0.113
According to the problem it seems that with one unit increase in price the demand is expected
to fall by 0.113 units.
In terms of percentage, with a percentage change in price,
The demand is expected to fall by 0.113×100 = 11.3% of the initial demand
The rise or fall in revenue is dependent on the nature of the elasticity curve; if the curve is
elastic the revenue is expected to fall with an increase in price, and if the demand curve is in
elastic the total revenue is expected to increase with increase in price, because people have
little choice then to move over to other goods.
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Here,
TR= Total Revenue
dTR= Change in Total revenue
The conditions are if ἐp>1,then dTR<0,which means with an increase in price total revenue
decreases.
ἐp=1then the demand is unit elastic, in this case dTR=0, that is no change in the revenue level
with change in price.
ἐp<1 Total revenue rises dTR>0 with an increase in price.
In the given problem the elasticity is less than 1, which means the demand for the product is
inelastic and the people have little scope to move over for other products and hence the
consumers will have to accept the price and this will result in additional revenue.
If the ἐp =1.1,
Then in this case the price elasticity of demand is more elastic than before hence any kind of
increase in price will lead to a greater fall in demandin comparison to the previous case
⇒ dq/q=-(1.1/7.50)
=-0.1467
Therefore an increase in price while the price elasticity ofdemand is -1.1 will lead to a fall in
demand of the commodity by 0.1467 units which is greater than 0.113 units as calculated
earlier. As the elasticity -1.1 is close to being unit elastic dTR will be close to zero which
means that any increase or decrease in price will not affect the total revenue of the firm in a
massive way.
(c) Income Elasticity
Income elasticity is the responsiveness in quantity demanded due to change in income. If
income elasticity of a good is estimated to be 0.75 which means 1 unit increase in will
increase the demand of the good by 0.75 units (Saada,2013, p.115).
The conditions for income elasticity are:
Where
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ἐy- Elasticity of income
If ἐy>0, the good is normal good
If ἐylies between 0 and 1 i.e. (0≤ἐy≤1) then the good is considered as a necessary good.
Ifἐy >1then the good is considered to be luxury good
Ifἐy<0 the good is considered to be a inferior good.
From the above conditions it can be stated that the income elasticity of 0.75 means that the
good is a normal and necessary good, any kind of increase in price will lead to decrease in
demand and any income rise will lead to increase in demand for product either in absolute or
relative terms. As per the question the said firm depending on the income elasticity’s can
makes its pricing decision and classification of products on whether the good is a normal,
inferior, necessary or luxury good and take measures accordingly.
(d)Revenue and Cost
As per the given case scenario the following table consisting of Total Revenue, Marginal
Revenue, Total Cost, Marginal Cost, Average Cost, Total Profit, and Marginal profit has been
prepared.
Total Revenue: Total revenue in economics refers to the total sales of a firm based on a
given quantity of goods. It is the total income of a company (Shepherd, 2015, p.109). It is
derived by multiplying the price of the good and the quantity of goods sold. In this case the
given total revenue equation is
TR=$800Q - $0.2Q2
Basing on this equation and assuming quantities at an interval of 100 units the Total Revenue
column has been constructed.
Marginal Revenue:Marginal Revenue is the additional revenue that will be generated by
increasing product sales by one unit.
The Marginal Revenue equation for this firm stands to
MR=dTR/dQ =$800- 2(0.2) Q (2-1)
MR=$800-0.4Q
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(In order to derive the marginal revenue functiona first order differentiation of the Total
Revenue function of the firm has been performed)
Total Cost: Is the summation of the variable cost and fixed cost which refers to the total
expense incurred in reaching a particular level of output. The total cost of the given firm is
TC=$38,000 + $250Q + $0.2Q2, where $ 38,000is the fixed cost and $250Q+$0.2Q2is
the variable cost.
Marginal Cost: is the additional cost incurred while producing one additional unit of output.
The marginal cost equation is determined through a first order differentiation of the total cost
function. Here the marginal cost function of the firm is
MC=dTC/dQ= $250+0.4Q (2-1).
MC= $250+0.4Q, and basing on this the marginal cost column has been prepared,
considering different values of output.
Average Cost: Is theper unit cost of a product which is derived simply by dividing the Total
Cost function by the total number of goods produced.
Average cost function for this case is:
AC=TC/Q = ($38000+ $250Q+ $0.2Q2)/Q
Total Profit: Total profit is the difference between the total revenue of the firm and the total
cost incurred by the firm in doing this.
Therefore,
Π = TR-TC
Π = (800Q-0.2Q2) - (38000+250Q+0.2Q2)
Π= 550Q-0.4Q2-38000
Here the total profit column has been created by using this function and applying various of
quantity at the specified interval level starting from 100 till 1000.
Marginal Profit:Marginal profit is the difference between the marginal revenue and the
marginal cost. Under the profit maximization approach, to maximize profits, a firm should
continue to produce a good or service up to the point where marginal profit is zero. Here the
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marginal profit columns have been prepared accordingly taking first order deraivative of the
total profit function (Fandel, 2012, p.102).
Price
Qua
ntity
Total
Revenue
Marginal
Revenue
Total
Cost
Marginal
Cost
Average
Cost
Total
Profit
Marginal
Profit
780 100 78000 760 65000 290 650 13000 470
760 200 152000 720 96000 330 480 56000 390
740 300 222000 680 131000 370 436.66 91000 310
720 400 288000 640 170000 410 425 118000 230
700 500 350000 600 213000 450 426 137000 150
680 600 408000 560 260000 490 433.33 148000 70
660 700 462000 520 311000 530 444.28 151000 -10
640 800 512000 480 366000 570 457.5 146000 -90
620 900 558000 440 425000 610 472.22 133000 -170
600 1000 600000 400 488000 650 488 112000 -250
Table 1: Revenue and Cost
(Source: Created by Researcher)
(e) Profit maximisation and Cost minimisation
100 200 300 400 500 600 700 800 900 1000
0
100
200
300
400
500
600
700
800
Marginal Revenue
Marginal Cost
Average Cost
Figure 1: Average, marginal cost and revenue curves
(Source: Created by Researcher)
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Here the marginal profit equation has been prepared by taking first order derivative of the
profit function.
M(Π)= dΠ/dQ =d(550Q-0.4Q2-38000)/dQ
⇒M(Π)=550-2(0.4)Q(2-1)
⇒ M(Π)=550-2(0.4)Q
⇒M(Π)=550-0.8Q
In determining the profit maximising output we equate
M(Π)=0
⇒550-0.8Q=0
⇒550=0.8Q
Therefore, Q*= 687 [Q* is the optimum output]
The S.O.C have been checked to verify the out come
This shows that:
d2Π/dQ2 = d(550-0.8Q)/dQ2 =-0.8,
Therefore the output is the profit maximising output and has been portrayed in
the table in a similar way and the function is a profit maximisation function as
d2Π/dQ2<0 which is the necessary condition for fulfilling the objective of profit
maximisation. And 687 units appear to be the profit maximising output.
In order to determine the cost minimisation output we apply first order differentiation to the
Average cost function
AC=($38000+ $250Q+ $0.2Q2)/Q
AC= (1/Q) 38000+250+0.2Q
⇒d(AC)/dQ = -38000Q(-1-1)+0.2
⇒d(AC)/dQ =-38000Q-2+0.2
F.O.C
d(AC)/dQ=0
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⇒-38000/Q2+0.2=0
⇒-38000/Q2=-0.2
⇒38000/Q2=0.2
⇒Q2= 38000/0.2
⇒Q2=19000
⇒Q=2
√19000
Q=± 435.899
S.O.C
d2(AC)/dQ2= d(-38000/Q2+0.2)/dQ2
⇒(-2)(-38000)Q-3
⇒76000/(Q3)
At 435.899
76000/ (435.899) = 0.009
And S.O.Ci.e. d2(AC)/dQ2>0 which is a necessary condition for minimisation, Therefore at
435.899 level of output the cost of the form is minimised, and negative output is not feasible
can be safely ignored.This has been depicted in the above graph at the point where the
average cost line intersects the marginal cost line.This is the point beyond which marginal
cost starts rising again and the point below which the minimum cost has not been reached and
there is further scope of output maximisation and can be explained form the above graph
(Baumol, 1977, p.158).
(F) Intuitive Analysis
The cost minimising output for the firm would be at the level where the average cost curve
intersects the marginal cost curve at the minimum point, analyticallywhich could be
translated as the point beyond the cost starts increasing.
The profit maximising output level is the level at which the profit is maximum foir the firm
beyond which the profit level start falling due to rising marginal cost and falling marginal
revenue of the firm.
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Part B
a. Brief history of the international company Microsoft
Microsoft is a MNC (Multinational Company) based on computer technology (Şerban, 2014,
p.65). The history of establishment of Microsoft is related to the past when the bigwig
personalities Bill Gates and Paul Allen in Albuquerque founded the company in the 4th of
month of April in the year 1975.
Its founding members was responsible for the success of Microsoft in terms of the different
computer based products manufactured by it such as operating systems based software,
official documents based software like that of Microsoft Word and Microsoft Outlook and
different gaming and entertainment software like Xbox and popular search engines like Bing
(Norton & Baye, 2013, p.88).
In the year of 1980, Microsoft made a deal based on partnership based agreement with the
International computer manufacturing giant IBM(International Business Machines) in terms
of the condition that IBMwill get access to use of operating system produced by Microsoft
and other products in return of the favour that Microsoft will get the royalty for every
production related sales and marketing process of IBM. Microsoft Company was also
requested by IBMto write or create a new operating system for the variety of computers
based OS called OS/2 by IBMin terms of the deal (Sloman et al. 2013, p.33).
In this periodthe multinational company of Microsoft faced strict competition from the
substituteoperating systems of OS/2 operating in the market. The result of this competition
went in favour of Microsoft because of the personal operating system got the advantage of
the OS/2 based operating systems in terms technological advancement (Griffiths & Wall,
2011, p.55)
Microsoft flourished from the era when it started producing standardised quality of operating
systems such as that of Disk Operating System (DOS) whose manufacture brought the
company its real success. Till date, Microsoft is performing as the best leading company in
the business of computer operating systems and allied products though it faces a strict
competition from Google, a computer technology based contemporary company of similar
nature and potential as that of Microsoft.
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b. Discussion of the nature of the market structure of Microsoft
Microsoft is a company which is based on monopoly based market structure in terms of its
nature and scope of business conduction and performance. Its monopoly based market
structure is the main reason for its success as a leader and pioneer manufacturing based
multinational company of international origin (Griffiths & Wall, 2011. p.23)
In order to discussin this regard we first need to understand the monopoly market structures
and the essentials of the frame work. Monopoly is a market structure where the businesses are
price setters and strategy based decisions of producing and selling products manufactured are
taken by the monopolist in the market. The monopoly market is based on the condition where
there is only one seller and many buyers in the market.As Monopolies are price-setters,
Monopolist sets its price above the market clearing price. This gives us an indication of a
very special feature of monopoly based market structure and it is that the goal or objective of
monopolist or monopoly firm is profit maximisation which it does by setting price above the
market clearing price or price where the price where marginal revenue is not necessarily
equivalent to the marginal cost which necessarily happens in the case of market clearing
equilibrium in perfectly competitive equilibrium condition (Mahoney and Qian, 2013,
p.1033). Thus the monopoly market has an imperfectly created market structure where price
set by the monopolist is equivalent to the marginal cost at the meeting point of marginal cost
and average revenue curve or demand curve. There is no supply curve in monopoly as a
single set of prices or price is charged for any varied quantity of goods manufactured in the
monopoly based market structure decided by the monopolist in terms of shift of average and
revenue curves rightwards when the quantity supplied is more at the similar price or when the
quantity supplied is less due to shift of the curves leftwards at the similar price. There is
hence no one to one correspondence or one to one relationship between prices sold and
quantity supplied in this variety of market framework. Monopoly market bas suggested in the
above mentioned illustrations belongs to market framework which is based on the aim of
maximisation of profits in terms of earning of supernormal profits that is profits earned in
excess of the normal or zero excess profits. The presence of excess capacities or non-ideal
capacities is the best outcome based on policy of profit maximisation strategy in monopoly
market. Process based on phenomenon of excess capacity in imperfect competition based
market structure of monopoly leads to improper allocation of total amount of industrial
resources and resource based capabilities allocated to the firm or industry beforehand. Further
there is no presence of freedom based on entry and exit of firms to and fro from the industry
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as against the case of perfect competition. Therefore, there is no challenge faced by the unit
policy holding monopolist from outside entrants or external firms surrounding its own
industrial cum business environment so that its policy of excess profits earning or
supernormal profits earning will be hurt or hampered. An interesting case to be noted here is
that in monopoly phenomenon may arise the need for welfare of the economy for government
regulation in terms of fixing the threshold level of maximum price charged by the monopolist
for its satiating the goal of profit maximisation. This is done through different price
regulation techniques which helps the government to put a barrier on unnecessary rise of
prices set by the monopolists for its products as this steps taken by the monopolist may prove
harmful or threatening to the interests of the of other industrial firms surviving in the
economy by huge struggle to compete against the unfair price competition thrown by the
monopolists. In terms of Pareto analysis, welfare generated in the monopolists is always in
terms of the costs being suffered by firms of other structural patterns and so Pareto Welfare is
not necessarily generated by the monopoly firm to the society due to the negative impacts of
hiking of excess prices of products for fulfilment of selfish motives of earning more than
excess profits by monopoly based market structural firms or companies (Hassan and Daniyal,
2013, p.8).
Microsoft is also a monopoly based firm or multinational company based on atrocious nature
of monopoly situations of market which helps it to dominate over other market structures in
the market. In terms of launching of various types of market products launched by the
multinational company of Microsoft like that of DOS, Windows XP and other Windows
Versions of operating systems, Xbox based gaming software and entertainment producing
software it is quite clear that their success in terms of market based business conditions and
activities are mainly due to the strict monopoly practices and strategies of monopoly origin
undertaken by the computer technology based company of Microsoft. Microsoft hence have a
dominating effect on other computerized technology based manufacturing companies or firms
living in and around the business world because of the rules and protocols of monopoly frame
of policy followed by it strictly and effectively which do hurt the business conditions based
on free market mechanism or laissez faire market as formulated by Say.
Additionally, Microsoft launched one of its most recognised business innovation based
objective of NET which helped the company to accelerate in global market based business of
computer OS, games, search engines and browsers and other allied software in 2002 which
quickened or accelerated its pace of development or progress in terms of business decisions
and stringent strategies based on the monopoly criterions of market analysis. It raised the
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intensity of price competition created by it by so many amounts that it even faced legal threat
in terms of violation of certain terms and conditions of business brought up by the European
Union based on its business strategies of monopoly origin (London et al. 2013, p.66).
It is still achieving success in terms of earning excess business profits because of its recent
policies of monopoly origin and may continue to do the same if there is no violation of terms
and conditions of policies and programmes practised by business members of European
Union in which it is still a present member of active origin.
c. Nature of the market to which Microsoft belongs in the history
The nature of market structure to which Microsoft belonged in the history is monopolistically
competitive market because previously in the past when it was established that is in the
period of 90s, it operated less stringently but more competitively than in the present time
(London et al. 2012, p.48).
There was the feature of both competitiveness with tenets in its market based policies and
programmes which enabled it to grow stronger and into being the most dominant firm of the
monopoly based international computer software market. IBMbased its market structure on
the monopolistically competitive market pattern in the past which helped it to gear nicely as a
incumbent computer technology based software manufacturing firm. Not only this the
products manufactured by Microsoft are of various origin and they range from operating
system based software to various varieties of gaming software and others which helped it to
function as monopolistically competitive market with blended characteristics of monopoly
and perfect competition in a combined form or manner (W. F. and Marks, 2010, p.88)
In the past period of its origin it faced a stiff competition from many contemporary computer
software manufacturing firms because it also featured some extent of perfect competition
based manufacturing processes and procedures. Microsoft policy of manufacture of operating
system in the past was vehemently criticized in terms of legal procedures in terms of disputes
put forth by another company as at the past in the period of 90’s the other contemporary
computer software manufacturing firms faced stiff competition from the strong quality based
Internet explorer based web search engine cum Borrower (Pearson et al. 2011, p.66).
The products of those companies were no match for the standardised product of Microsoft
based Internet Explorer as they were cheap in terms of quality which forced them to sue
against Microsoft in legal bodies or courts. The outcome of this legal proceedings launched
against the business of Microsoft was that it had to cut short its price and its monopoly power
and take certain features or exercise some competition based features in its market structure
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and sell some already produced versions of Internet explorer for free in the computer
software technologies related market (Hirschey & Pappas, 2008, p.77). Therefore it
functioned as monopolistically competitive market in the past history of its business
operations.
d. Discussion about the characteristic of the past market structure of
Microsoft
The characterisation of the market structure of Microsoft hasbeen defined in terms of its
performances and other functioning’s in a monopolistically competitive market structure of
thesoftware manufacturing international giants. The characteristic of the monopolistically
competitive market structure practised in the past by Microsoft deals with the activities
related with business decisions in the past which includes different types of marketing
innovations and innovations taken by Microsoft in different types of scenarios and
circumstances of computer software based business. The types of marketing decisions taken
by Microsoft represents the blended or mixed features of properties of pure competition and
monopoly based imperfect competition taken as a whole ( Levitt & Dubner, 2010, p.77).
Let us first become familiar with the characteristics and quantity based pricing strategies of
monopolistically competitive market in a sound and gross manner.
The monopolistically competitive market is market structure whose business decisions are
taken keeping into consideration the fact that there is a single variety of products
manufactured by the seller or seller's in terms of monopoly but they can be of differentiated
origin because of the reason that the producers are allowed a license in terms of manufacture
of homogeneous good but of different variety as per the producer's choice based decisions as
per the terms and conditions of monopolistically competitive business. The particular variety
of monopolistically competitive market of Microsoft is based on varieties in its market
structure in terms of several specially combined characteristics of pure competition and
imperfect competition in a varied and differentiated manner. It is the duty or responsibility of
producer or producers of monopolistically competitive market to use the dual characteristics
of business based on its own profit or sales maximising objective (Dobbin and Baum, 2014.
p.88). A very interesting topic or feature of monopolistically competitive market is that it
produces or exhibits different behavioural attitudes in the two time pattern of business
namely the short span of time that is the short run and the long span of time that is the long
run behaviour of market (Bloom et al. 2012, p.124).
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This differentiated behaviour makes it special and distinctive or distinguished from the
monopoly market. It is commonly seen that firms or companies of monopolistically
competitive market orientation prefers to absorb or extract the goal of profit maximisation in
terms of earning supernormal profits in the short run and normal or zero or nil excess profits
in the long run (Background Allen et al. 2012, p.90).
The monopolistically competitive market also features excess capacity in terms of earning
excess profits in the short run indicating its operation on the downward sloping part of short
run based average cost in the short run. In contrast to this the market depicts ideal capacity or
total used capacity in the long run where it operates on the bottom or minimum point of long
run average cost curves in terms of economic perspectives. The additional feature of entry of
new firms and exit of old or obsolete firms from the industrial environment is permissible to
some extent in the monopolistically competitive market. This feature helps the monopolistic
firm to break the excess load of its monopoly and enter into perfect competition with other
firms in and around the industry based market environment while facing threat from legal
bodies and governments. The characteristics of pure competition are based and use in certain
criterions or cases of business and the characteristics of imperfect competition is witnessed in
terms of the other criterions or cases of business based on economic perspectives and
policies.
Hence, this dual feature of perfect and imperfect competition does benefit the monopolistic
competitive firm in varied amounts in the short run and long run respectively with respect to
special kinds of business scenarios and circumstances.
Now this market structure of monopolistically competitive market was practiced and
exercised by Microsoft based multinational company of computer software origin and
processes measured in terms of economic scenario as it was forced to do so as it was a new
entrant in the market and instead of that had the guts to become a leading producer of
computer software based technological products in the business market. Later with
performance based profits related advancement and gain in experience it became the
supergiant of software market based on computer manufacture based technology and related
or allied fields and processes of diverse origin and continued to function as a monopoly with
strict business related goals or aims (Aswani et al. 2013, p.1405).
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e. Degree of government intervention needed in present form of market of
Microsoft
Present market competition is somehow threatening for maintaining economic policies and in
that concern, government interventions may work as direction for mannered operations.
Instead of introducing and implementing free trade market trends, it is important that a
respective business like Microsoft should follow national policies. Now, being a global
business, Microsoft has to follow different economic policies available in different countries.
Therefore, it has to make different policies for different countries (Şerban, 2014, p.70).
Throughout UK, it has already revised some norms in order to support government, but in
some terms, these policies have not satisfied business perspectives. If it is to manage national
policies, there are specific needs of government interventions.
There are interventions made by both Microsoft and government. The both have differences
in certain factors and issues. Initially the government interventions are just like barriers and
obstacles to business orientation of private business. There are many counterproductive
government policies and procedures where there are certain norms that act against free trade
policy of set by the government, keeping in mind that the present market form needs to utilise
global trade (Bloom et al. 2012, p.30). Therefore, it can be stated that the policy makers must
focus on globalisation as the form of business in formulating policies of that kind and the
harnesses could be reduced.
In case of institutional infrastructure, government interventions are also a challenge for
Microsoft. Somehow, organisational policies of a private business giant like Microsoft are
violated. Therefore, policy makers are not entirely dependent of social or national policies
while managing organisational operation or infrastructure. In the same way, market
distribution for segmentation also varies according to business needs. Government
interventions are somehow direction makers for business giants, but the degree of activities
are always limited and up to the mark for such a business giant like Microsoft.
Sharing of information is important for managing efficient marketing strategies. Therefore,
Microsoft never tends to follow traditional strategies. At the same time, some national
policies are still stuck to traditional efforts. This scenario is available for different countries
and continents. Finally, it can be said that government interventions in marketing economics
are transparent according to activity, but implementations or share on a private business is
truly marginal.
Conclusion
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Thus, it can be concluded that the economic factors prove to be an essential factor while
acquiring a business entity. Even a company like Microsoft needs to keep in mind all the
economic variables before progressing to growth and expand their business. The competition
among the multinational companies is intense and a reputed company like Microsoft need to
follow all the Government rules and regulations in order to comply with the laws of the
country. The activities undertaken by the companies prompt the Government to intervene
with the existing nature of business. These prove to be barriers to practise in kind of business.
Hence, it is necessary to maintain the Government rules while conducting business. Failure to
do so can hinder the business process of a reputed company like Microsoft. It has been seen
that the product quality of Microsoft has been reliable over the years. Thus, to maintain this
quality it is important for the company to abide by the Government laws of the country. With
the advancement in the technological field, the company has become one of the biggest
names in the technological world. The benefit of the market of Microsoft can help the
monopolistic and non-monopolistic market structure of the countries.
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Fundamentals of Managerial Economics, London, Dryden. Harford, T. (2013)
Hassan, A. and Daniyal, M., (2013). Cartoon network and its impact on behavior of school
going children: a case study of Bahawalpur, Pakistan. International Journal of Management,
Economics and Social Sciences (IJMESS), 2(1), pp.6-11.
Love, A.E.H., 2013. A treatise on the mathematical theory of elasticity (Vol. 1). Cambridge
University Press.
Mahoney, J.T. and Qian, L., (2013). Market frictions as building blocks of an organizational
economics approach to strategic management. Strategic Management Journal, 34(9),
pp.1019-1041.
Managerial Economics & Business Strategy, London, FT/Prentice Hall. Griffiths, A. & Wall,
S. (2011):
Managerial Economics, Study Guide, London, John Wiley & Sons. Sloman, J., Hinde, K. and
Garrat (2013)
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Managerial Economics: Theory, Applications and Cases, New York, WW Norton. Baye, M.
(2013):
Recommended Griffiths, A. & Wall, S. (2011)
Saada, A.S., 2013. Elasticity: theory and applications (Vol. 16). Elsevier.
Şerban, S., (2014). From marketing to semiotics: The way to marketing semiotics. Journal of
Self-Governance and Management Economics, 2(2), pp.61-71.
Shepherd, R.W., 2015. Theory of cost and production functions. Princeton University Press.
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