Final answer:
A firm can become a monopoly when it is the sole provider of a product or service with no close substitutes. Monopolies can arise due to various reasons, such as obtaining exclusive rights to a patented invention or technology, acquiring or merging with all competitors, consistently outperforming competitors, or government regulations and barriers to entry. Microsoft is an example of a monopoly in the operating systems market with its Windows operating system.
Step-by-step explanation:
A firm can become a monopoly when it is the sole provider of a product or service with no close substitutes in the market. This means that there are no other companies offering a similar product or service that can compete with the monopolistic firm.
Monopolies can arise due to various reasons, such as:
- A firm obtaining exclusive rights to a patented invention or technology
- A firm acquiring or merging with all competitors in the market
- A firm consistently outperforming competitors and gaining a large market share
- Government regulations or barriers to entry preventing new firms from entering the market
For example, Microsoft has achieved a monopoly in the operating systems market with its Windows operating system, as there are no other operating systems that can directly substitute Windows.