QUESTION 1 (25)

1.1 With reference to the case study discuss the high barriers to entry in the market
for PC operating Systems. (10)
1.2 Critically evaluate the pattern of potentially anti-competitive activities by
Microsoft towards its competitors. Do you think that the government should always
try to eliminate monopoly power? Substantiate your solution with facts in the case
study. (15)
QUESTION TWO (25)
2.1 Describe and explain how the internet browsers pose a competitive threat to
Microsofts potential operating system monopoly. (15)
2.2 Our business model works even if all internet software is free . We are still
selling operating systems. What does Netscapes business model look like? Not very
good.
Critically evaluate how the anti-competitive behaviour of Microsoft hinders
innovation or development of advanced technological products
Question 3
3.1 Explain ANY THREE(3) types of unemployment being experienced in South Africa
3.2
3.2.1 Calculate the unemployment rate according to the strict definition.
3.2.2 Compute the unemployment rate according to the broad definition.
3.2.3 Find the labour participation rate.
3.3 The strategies which the government of Namibia could use to reduce income
inequality and unemployment in or among the following:
3.3.1 Depressed industries
3.3.2 Unskilled workers
3.3.3 Depressed geographical regions
3.3.4 Teenagers

Question 4
4.1 Profit maximising price and output if it charges a single price
MR = 520 4Q
MC = 100 + 2Q
520 4Q = 100 + 2Q
Q = 70 units of output
P = 520 2Q = 520 2(70) = $380 per unit of output
4.2 The single price monopolists profit
Profit = TR TC
TR = P*Q = ($380 per unit)(70 units) = $26,600
TC = 100Q + Q2 + 50 = 100(70) + (70)(70) + 50 = $11,950
Profit = $14650
4.3 At the profit maximising quantity, what is this monopolists average total cost of
production (ATC)
ATC = TC/Q = 100 + Q + (50/Q)
Then replace Q with 70 (the profit maximizing quantity) to find the average total
cost of producing 70 units of output.
ATC= 100 + 70 + (50/70) = $170.71 per unit
4.4 At the profit maximizing quantity, what is the profit per unit for this single price
monopolist
Profit per unit = Price per unit ATC per unit when producing 70 units of output
Profit per unit = 380 170.71 = $209.29 per unit
4.5 Critically evaluate whether government corporations such as ESKOM should be
privatised