Strategic Behavior Oligopolies An interesting example ofstrategic behavior comes from a 1997 article about Microsoftsinvestment in Apple (New Straits Times 1997). The article isincluded in the Required Readings list. Facing tough anti-trustscrutiny from government agencies Microsoft provided financialsupport to Apple in order to ensure Apples survival andtherefore to ensure that competitiveness in the industry remains.Moreover the partnership with Apple provided an additional marketfor Microsofts products the MS Office and the IE products wereto be bundled with the MAC OS as one of the conditions for thisfinancing. Discuss this case in the context of market structure andstrategic behavior. What market structure do these firms operatein? Why did Microsoft need to preserve competitiveness in theindustry? What was Microsoft afraid of in the event that Apple didnot survive?

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