Monopolies and oligopolies Flashcards
what is the nash equilibrium
a rational equilibrium that can last in the long term
what is a dominant strategy
is where one single strategy is best for a player regardless of what strategy the other player in the game decides to use
impacts of game theory
- price rigidity
- knowing that lowering prices can trigger retaliatory price cuts for competitors, oligopolistic firms may focus on branding/ advertising and quality to attract consumers without reducing profit margins. leads to price stability within the market - temptation to collude
- firms may see benefits in collusion to maintain high prices and maximise joint supernormal profits, eg starting a cartel
- such collusive practices may limit competitive pressures - challenges of long run collusion
- collusion offers short term profitability, but may not be sustainable in the long run
- in the long run, firms may cheat to gain a competitive advantage of due to external pressures like fines
- collusion often ends as firms start competing again, leading to price reductions - incentive to cheat on collusive agreements
- individual firms have a strong incentive to cheat on a collusive agreement to gain more customers by slightly lowering prices
- by offering lower prices, a firm can increase its market share at the expense of colluding partners, maximising short term gains
- this undermines the stability of collusive agreements, leading to eventual breakdowns
what is game theory
a theory that explores the reaction of one player to a change in strategy of another player
characteristics of an oligopoly
- few firms dominate the market
- high concentration ratio
- differentiated goods, so firms are price makers
- high barriers to entry and exists
- interdependence - firms make decisions based on the actions and reactions of rival firms
- price rigidity
- non price competition
- profit maximisation not the sole objective
meaning of high concentration ratio
when a group of firms share most ≈70% of market share
examples of oligopolies
- soft drink industry - pepsi,coke,sprite
- car industry - mercedez ,bmw
- supermarket - sainsburys,aldi,tescos
- airlines
- energy - SSE british gas etc
explain the kinked demand curve - interdependence
- if a firm raises its price above market level, competitors are unlikely to follow, as they can increase market share by keeping prices stable
- competitors will shift to competitors offering lower prices, causing the original firm’s qd to fall disproportionately to the price increase
- if a firm decreases their price, qd will increase by a v small amount
- if a firm lowers its price, competitors are likely to match the reduction to protect their own market share
- the price matching diminishes the individual firms ability to attract more customers
- the demand curve is more inelastic at this point, as all firms in the market lower their prices, limiting the qd increase and reducing revenue for all firms
using the linked demand curve, explain why oligopolistic firms do not need to change prices
- firms aim to max profit at MC = MR
- if the MC curve shifts within the vertical gap in the MR curve:
- the profit maximising price and output remain unchanged, as there’s no unique MR to cross the new mc within the gap
- so even with minor changes in costs, firms don’t need to adjust prices to maintain profit maximisation
- so the price stays fixed despite cost fluctuations, contributing to price rigidity
conclusions from linked demand curve
1, price competition may still happen
- a firm may reduce prices to try and increase market share (even though this wouldn’t work)
- non price competition
- the kinked demand curve shows the drawbacks of price changes, leading firms to focus on non price factors such as product quality, branding, advertising etc
- as this is a safer way to differentiate and attract customers without risking profitability through lower prices - temptation to collude
- the stability suggested by the linked demand curve may make firms consider collusion to maximise profits collectively, as maintaining stable prices benefits all players
- collusion avoids the risks of price wars while ensuring higher collective profitability
what is overt collusion
where firms get together and agree to fix prices/quantity
what is tacit collusion
when there is no formal communication between firms, they follow prices set by price leader
what factors are likely to promote a competitive oligopoly
- if there are many firms - as organising collusion when there are a lot of firms is harder
- if new market entry is possible - then making huge supernormal profits by colluding together is not sustainable as it will only incentivise new firms to enter the market and take those profits
- if there is one firm with significant cost advantage - it makes it difficult to organise/fix prices
- if there are homogenous goods, then firms don’t have price making power
- saturated market - where there are a lot of price wars and price competition
factors that promote collusive oligopolies
- small number of firms - they can get together easily to fix prices
- if firms have similar costs
- high entry barriers- eg predatory pricing
- ineffective competition policy
- if there’s high consumer loyalty and consumer inertia means lower incentive to cheat
pros and cons of a competitive oligopoly
pros:
- higher consumer welfare and lower prices
- as firms compete with each other
- consumers benefit from higher choice and more affordable goods, increased CS
Non price competition :
- competition forces firms to innovate to maintain or increase market share, leading to advancements in product quality, technology , etc
- leads to increased dynamic efficiency
- increased allocative efficiency, as firms operate close to where P = MC, ensuring resources follow consumer preferences
cons
Price Wars
- Intense price competition between firms in a competitive oligopoly can lead to price wars, driving prices below costs for extended periods.
- This harms smaller firms that may lack the resources to sustain losses.
- Smaller firms may exit the market, reducing long-term competition.
- Consumers may face higher prices once dominant firms regain control after eliminating competitors.
Reduced Profits for Innovation
- The pressure to compete on price can reduce firms’ profit margins, leaving less capital available for investment in research and development (R&D).
- A lack of innovation can slow industry progress, reduce product quality improvements, and limit consumer benefits over time.
cons of a competitive oligopolistic market
Price Volatility
- Competition can lead to frequent price changes and uncertainty in the market, especially if firms aggressively try to undercut each other.
- Consumers might face confusion and difficulty predicting prices, leading to instability in the market.
Potential for Inefficiencies
- Firms in a competitive oligopoly may engage in wasteful activities like excessive advertising and marketing, which increase costs without necessarily improving quality.
- This reduces productive efficiency, as resources could be better allocated elsewhere.
Short-Term Focus
- Firms in a competitive oligopoly might focus on short-term profits and quick market gains, rather than long-term investment in innovation or sustainability.
- This could lead to underinvestment in areas that drive long-term growth, such as research and development.
pros of a collusive oligopoly
Price Stability and Predictability
- Colluding firms can agree on prices, reducing volatility and providing consumers with stable, predictable pricing.
-This can benefit consumers in terms of knowing what to expect, although it may come at the cost of higher prices.
Increased Profitability for Firms
- By colluding, firms can agree to set higher prices and reduce competition, leading to higher profits for all members of the cartel.
- Firms benefit from a more secure market and higher returns on their investments.
Efficiencies in Resource Allocation
- Collusion can lead to economies of scale if firms combine resources or coordinate on production strategies.
- This could improve productive efficiency in some cases, as firms may be able to reduce costs through shared infrastructure or joint investment.
cons of a collusive oligopoly
Allocative Inefficiency
- In a collusive oligopoly, firms often restrict output and set higher prices than they would in a competitive market (P > MC), leading to allocative inefficiency.
- Consumers face higher prices, which reduces overall welfare, as they are paying more than they would in a competitive market.
Reduced Innovation
- With less competition, firms may have less incentive to innovate or improve their products since they can achieve high profits without needing to differentiate.
- This leads to dynamic inefficiency, as firms do not invest in research and development to improve products or services, stifling technological advancement.
Risk of Regulatory Penalties
- Collusion is illegal in many countries and can attract heavy fines, penalties, and reputational damage if discovered.
- Firms may face legal and financial consequences, which can harm their long-term prospects and erode consumer trust in their products.
Reduced Consumer Choice
- Collusive behavior often leads to limited product variety as firms focus on maintaining high prices rather than offering diverse or improved products.
- Consumers face fewer options and are unable to choose products that better meet their preferences, reducing consumer welfare.
what is a cartel
a form of collusion between suppliers. it occurs when two or more firms enter into agreements to restrict market supply and thereby fix the price of a product in a particular industry
example of cartel
OPEC - oil
KLM - airline who got fined 127 million for price fixing in cargo sector
what is a monopoly
a single dominant seller in the market
CMA defines it as one firm having over 25% of market share
features of a monopoly
- differentiated products
- high barriers to entry/exit, so sustainable spn profits
- price makers
- imperfect information
- firms are profit maximisers
comment on efficiencies in a monopoly
- allocative efficiency not being reached, as P ≠ MC, price is greater than MC so they exploit consumers with higher prices and lower cs, they also restrict output
- productive efficiency not being reached, they are voluntarily forgoing (going without) economies of scale by not producing at the minimum point ofAC
- There is X inefficiency if they become complacent as they consistently make supernormal profits
so no static efficiency - dynamic efficiency can be reached as there are long run supernormal profits. there are high barriers to entry as well as imperfect information and this keeps new forms out of the market. the monopolist can reinvest back into the company in the form of tech etc
benefits of a monopoly (FOR A FIRM)
- Eos
- monopoly firms can operate on a large scale, benefiting from economies of scale, which reduces their LRAC
- lower costs enhance supernormal profits, which can be reinvested into R&D,improving innovation and efficiency
- this reinvestment can potentially lead to long term benefits for the firm and consumers, such as higher quality goods or cost savings passed on in lower prices
Cross-subsidisation
- Monopoly firms can use profits from one profitable sector to subsidize losses in less profitable or loss-making sectors.
- This diversification helps the firm maintain market presence in multiple areas, contributing to its resilience and brand reputation.
Market Stability
- As the sole supplier, a monopoly can avoid price wars and instability associated with competition, allowing for predictable revenue streams.
- Stability supports long-term planning and investment, enabling the firm to focus on improving operations and expanding its market influence.
Price Discrimination
- Monopoly firms can engage in price discrimination, charging different prices to different consumer groups based on their willingness to pay. This maximizes revenue and profits.
- Higher profits from price discrimination can be reinvested into the firm, contributing to innovation and product development.
costs of a monopoly (FOR A FIRM)
- Risk of investigation by competition authorities
- Monopoly power may attract scrutiny and investigation by regulatory bodies such as the CMA
- penalties and legal challenges can impose significant costs to the firm and harm its reputation, potentially reducing profitability - Deos
- if a firm grows too large, it may face diseconomies of scale, such as higher managerial/coordination costs
- these inefficiencies can erode cost advantages and negatively impact profitability - Complacency and inefficiency
- lack of competitive pressure may lead to complacency, leading to X inefficiency and organisational slack
- resulting in higher costs and lower productivity, reducing the potential benefits of monopoly power over time
benefits of a monopoly for consumers
- Economies of scale and lower prices
- monopolies achieving eos can reduce production costs, potentially lowering prices for consumers
- lower costs also allow firms to produce at a larger scale, meeting consumer demand more - innovation through r&d
- supernormal profits allow monopolies to invest in research and development, creating higher quality products or entirely new goods over time
- consumers benefit from access to innovative and improved products over time - International competition
- a domestic monopoly may face competition from foreign firms, incentivising it to maintain efficiency and competitive pricing
- this ensures consumers still gain access to better prices and quality
costs of a monopoly for a consumer
- Allocative inefficiency and higher prices
- monopolies set prices above marginal cost, leading to higher prices for consumers and reduced allocative efficiency
- consumers end up paying more than the optimal price for goods and services, reducing their overall welfare - deadweight loss
- monopolies create DWL by reducing consumer and producer surplus, as fewer goods are produced and consumed than in a competitive market
- this represents a loss of societal welfare and economic efficiency - no guarantee of reinvestment
- monopolies, facing no competition, may not reinvest profits into improving products or processes
- consumers may experience stagnant quality and limited choices, as the firm lacks incentive to innovate or enhance services - Lack of incentive to improve products
- with no threat from competitors, monopolies may not prioritise product development or customer satisfaction
- consumers may face outdated products or substandard service qualities
costs of a monopoly to suppliers
- monopsony power over suppliers
- a monopoly with monopsony power may exploit suppliers by forcing lower prices, which can reduce suppliers revenues and stifle innovation or production at earlier stages of the supply chain
- this can have knock on effects of the broader economy, such as reduced investment and job losses in upstream industries
what is a natural monopoly
- occurs when it is most efficient for one firm to supply the entire market, due to high fixed costs and significant eos
- own 100% market share
examples of natural monopolies
- national grid
- tfl
- thames water
features of a natural monopoly
- large fixed costs, result in a downward-sloping long-run average cost (LRAC) curve, where increasing output reduces average costs.
- effective for one provider to serve the market.
Allowing multiple firms to build duplicate tracks would create wasteful duplication, driving up costs and increasing fares for consumers. - A single operator can achieve economies of scale, such as bulk purchasing of equipment or better use of management expertise, further lowering average costs.
- govt subsidises any losses
in a natural monopoly, what might competition cause
- wasted products
- productive and allocative efficiency
how would a natural monopoly be efficient
if it is regulated
describe a non regulated natural monopoly graph
- no allocative efficiency or productive
- firm sets price where costs = mr, this restricts output and increases price
- as they provide essentials, this is unsustainable in the long run, so governments enforce regulations
describe a regulated natural monopoly(graph)
- prices are lowered to where P = MC
- increased output
- however AC is greater than AR, so there’s a huge loss
- usually a subsidy is given that is the same value of the loss
- allows them to make normal profits in LR
key takeaways from natural monopolies
- significant economies of scale
- minimum efficient scale is very high
- productively efficient for one firm to operate in the industry
- pricing for allocative efficiency leads to losses
- case for government ownership or subsidy, or right regulation
what is price discrimination
where a firm charges different prices to different consumers for an identical good with no differences in costs of production
conditions necessary for price discrimination
- firm needs price making ability, so need some kind of monopoly power
- need to have information to separate the market into different PED, eg identify consumers with inelastic PED so they can charge higher prices
- prevent reselling (market seepage)
what is price discrimination in the third degree
when a firm is able to segment the market into different ped. so there’ll be one group of consumers with inelastic PED and one with elastic PED
- a firm will recognise that based on things like age, income, time differences, and will therefore charge different prices to different groups
- eg rail company
advantages of price discrimination
Dynamic Efficiency
- PD enhances firm profitability, enabling greater investment in R&D.
- Supernormal profits generated from higher-paying consumer groups can fund innovation, product development, and technology improvements.
Maximizes Producer Surplus
- Firms capture more consumer surplus by charging different prices to different consumer groups based on their willingness to pay.
- Increases revenue and profitability, allowing firms to sustain operations and potentially reinvest in R&D or other activities
Enables Economies of Scale
- Higher revenues from price discrimination allow firms to produce at a larger scale, reducing average costs.
- Consumers may benefit from lower prices in the long run due to cost savings passed on by firms.
Cross-Subsidization of Goods/Services
- Profits from high-paying consumers can be used to subsidize lower prices for price-sensitive groups or fund unprofitable services.
- Expands access to products and services, such as student discounts or discounted medicines in developing countries
Increases Market Efficiency
- Firms are able to serve a broader range of customers by tailoring prices to different demand levels.
- Ensures that some consumers, who otherwise would not have been able to purchase, can still access goods or services, improving allocative efficiency and accesibility, and market share
cons of price discrimination
Allocative Inefficiency
- leads to prices above marginal cost, resulting in reduced consumption and allocative inefficiency.
- In some forms of price discrimination, firms charge higher prices to consumers with inelastic demand, restricting the quantity sold to those who might have purchased at a lower price.
- This misallocation of resources means some consumers are priced out of the market, leading to deadweight loss and societal welfare loss.
Inequality
- Discrimination widens income inequality, as those with lower elasticities pay disproportionately higher prices.
- Third-degree price discrimination often targets groups with less bargaining power, such as older individuals or those in specific locations, leading to regressive effects.
- Price disparities can exacerbate societal inequality, making essential goods or services less accessible to vulnerable groups, particularly in sectors like transportation or healthcare.
Anti-Competitive Pricing
- Price discrimination may undermine competition and lead to monopolistic practices.
- Predatory pricing in third-degree discrimination allows firms to set lower prices for specific consumer groups or regions, driving smaller competitors out of the market.
- This creates entry barriers and reduces market dynamism.
- Reduced competition can lead to long-term consumer harm, as dominant firms consolidate power and potentially increase prices once competitors are eliminated.
advantages of price discrimination for consumers
1️⃣ Increased Access to Goods and Services → More Consumers Benefit
Firms can offer lower prices to more price-sensitive consumers (e.g., students, pensioners) through third-degree price discrimination.
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This allows low-income consumers to afford essential goods and services they otherwise couldn’t (e.g., cheaper train tickets for students).
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As a result, market participation increases, ensuring more people can access necessary goods and services, which enhances overall consumer welfare.
2️⃣ Higher Revenue for Firms → More Investment in Innovation and Quality
By charging different prices to different consumer groups, firms can increase total revenue and profits beyond what they would earn with a single price.
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This extra revenue can be reinvested into R&D, product quality improvements, and better customer service.
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Consumers ultimately benefit from better products, improved technology, and enhanced service offerings, making their purchases more valuable.
3️⃣ More Efficient Use of Capacity → Reduced Congestion and Shortages
Price discrimination allows firms to manage demand more effectively by charging different prices at different times (e.g., peak vs. off-peak pricing in transport).
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This helps reduce overcrowding during peak hours and encourages consumers to shift their consumption to less busy periods.
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Consumers benefit from reduced congestion, better service quality, and improved availability, especially in industries like travel, entertainment, and utilities.
4️⃣ Cross-Subsidisation → Lower Prices for Essential Services
Higher prices paid by less price-sensitive consumers can be used to subsidise lower prices for others (e.g., in healthcare, public transport, or education).
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This enables firms to maintain services for those who need them most while still remaining profitable.
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As a result, vulnerable groups (e.g., the elderly, disabled, or students) gain access to affordable services that improve their quality of life.
5️⃣ Market Expansion → Increased Consumer Choice
Price discrimination allows firms to serve different consumer groups that would otherwise be priced out of the market.
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This can make certain markets more viable and sustainable, encouraging firms to expand their offerings.
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As a result, consumers benefit from greater choice, more competition, and potentially lower prices in the long run due to economies of scale.
Arguing That a Sector Is a Natural Monopoly – Chain of Analysis
1️⃣ High Fixed Costs → Significant Economies of Scale
Certain industries (e.g., utilities, railways) require massive upfront investment in infrastructure (e.g., power grids, rail networks).
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As firms produce more output, average costs (AC) continue to fall because fixed costs are spread over a larger quantity of goods/services.
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This creates significant economies of scale, meaning a single large firm can operate at a lower cost per unit than multiple smaller firms.
2️⃣ Duplication of Infrastructure Would Be Inefficient
If multiple firms tried to compete in a natural monopoly sector (e.g., building multiple electricity grids in one city), each firm would have to set up its own expensive infrastructure.
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This would result in wasteful duplication and drive up total industry costs, leading to higher prices for consumers.
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Thus, allowing a single firm to dominate ensures that resources are used efficiently, keeping costs lower.
3️⃣ Declining Long-Run Average Cost (LRAC) → Single Firm Can Always Undercut Competitors
Due to high fixed costs and economies of scale, a single firm can always produce at a lower cost per unit than any new entrant.
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If a new firm tries to enter, it lacks the same cost advantages and must charge higher prices to remain profitable.
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As a result, the incumbent firm can price out competitors, making competition unsustainable in the long run.
4️⃣ Essential Service Provision → Monopoly Prevents Market Failure
Many natural monopolies exist in essential sectors (e.g., water supply, electricity, rail transport), where reliability and universal access are crucial.
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If multiple firms operated in these markets, some areas might be underserved (e.g., rural areas with low profitability).
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A single regulated monopoly ensures continuous service provision, avoiding market failure due to under-provision of essential services.
5️⃣ Contestability Is Limited → High Barriers to Entry
Natural monopolies often involve huge sunk costs (e.g., power plants, water pipelines), making entry extremely difficult for new firms.
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Even if a competitor enters, it cannot recover these sunk costs if forced to exit, discouraging investment.
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This means the market remains inherently uncompetitive, reinforcing the idea that it is more efficient for a single firm to dominate.
Arguing against a sector being a natural monopoly
1️⃣ Economies of Scale May Be Exhausted at a Lower Output Level
While natural monopolies benefit from economies of scale, there may be a point where average costs (AC) stop falling beyond a certain output level.
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If this occurs before the entire market is supplied, then multiple firms could coexist at similar cost levels rather than a single firm being necessary.
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This suggests the market does not need just one firm to be efficient, meaning it is not truly a natural monopoly.
2️⃣ Technological Advancements Can Reduce Barriers to Entry
In industries like telecommunications and energy, advancements in technology have lowered fixed costs (e.g., decentralized energy production, wireless networks).
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This allows smaller firms to enter and compete, reducing the dominance of a single firm.
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If barriers to entry can be overcome, then the industry should not be classified as a natural monopoly.
3️⃣ Competition Can Drive Innovation and Efficiency
Monopolies, even natural ones, often lack competitive pressure, leading to productive inefficiency (higher costs due to wasteful spending).
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If competition is introduced, firms have a greater incentive to innovate, cut costs, and improve service quality.
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This means that allowing multiple firms could increase efficiency rather than relying on a single dominant firm.
4️⃣ Price Discrimination and Consumer Exploitation Risks
Natural monopolies often use their power to engage in price discrimination, charging higher prices to different consumers based on willingness to pay.
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This leads to allocative inefficiency because some consumers may be priced out of essential goods or services.
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If competition were introduced, firms would be forced to lower prices, improving consumer welfare.
5️⃣ Potential for Regulation to Mimic Competitive Benefits
Even if a market has some characteristics of a natural monopoly, government regulation (e.g., price caps, service requirements) can force firms to act competitively.
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If an industry can be effectively regulated, then maintaining a monopoly is unnecessary to ensure efficiency and fairness.
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This suggests that markets should not be automatically classified as natural monopolies without considering the role of regulation.
examples and benefits of price competition
🔹 1️⃣ Limit Pricing (Discouraging Market Entry)
An incumbent firm sets prices low (just above average cost) to make it unprofitable for new firms to enter the market.
This protects market share and reduces long-term competition.
Existing firms benefit from lower competition, maintaining a dominant position.
Consumers might enjoy lower prices initially, but could face higher prices in the long run due to reduced competition.
📌 Example: Amazon uses limit pricing by keeping profit margins low, making it difficult for new retailers to compete.
🔹 2️⃣ Predatory Pricing (Driving Out Competitors)
A firm temporarily sets prices below cost to force competitors out of the market.
Once rivals exit or become weak, the firm raises prices to recoup losses.
This eliminates competition, leading to higher long-term profits.
Consumers benefit from short-term low prices, but in the long run, they may face monopoly pricing.
📌 Example: Uber vs. Local Taxi Firms – Uber used very low fares to drive traditional taxis out of business, then later increased prices.
🔹 3️⃣ Price Matching (Maintaining Market Share)
Firms promise to match competitors’ prices, reducing the incentive for customers to switch.
This prevents price wars, while still keeping prices low for consumers.
Consumers feel reassured that they are getting the best deal.
Firms retain market share while maintaining brand loyalty.
📌 Example: John Lewis’ ‘Never Knowingly Undersold’ policy guaranteed to match competitors’ prices, keeping customers loyal.
🔹 4️⃣ Price Discrimination (Maximizing Revenue)
Firms charge different prices to different consumer groups based on willingness to pay.
This allows businesses to maximize revenue and profits by capturing more consumer surplus.
Consumers with lower willingness to pay (e.g., students) can access goods at cheaper rates.
Helps firms cover fixed costs and reinvest in innovation and quality improvements.
📌 Example: Airlines charge different fares for economy, business, and first-class passengers based on demand elasticity.
examples and benefits of non price discrimination
🔹 1️⃣ Advertising (Brand Loyalty & Market Power)
Firms invest heavily in advertising to increase brand recognition and customer loyalty.
This helps create perceived product differentiation, even if the actual product is similar to competitors’.
Consumers become less price-sensitive, allowing firms to charge premium prices without losing demand.
The firm gains market power, reducing the risk of competitors stealing market share.
📌 Example: Coca-Cola vs. Pepsi – Coca-Cola’s strong brand image through advertising helps maintain high demand, despite similar pricing.
🔹 2️⃣ Product Design & Packaging (Perceived Quality & Differentiation)
Firms invest in unique product designs and packaging to differentiate themselves from competitors.
Aesthetic appeal and functionality enhance perceived value, making consumers willing to pay more.
Differentiation helps firms reduce price elasticity of demand, allowing for higher profit margins.
Strong branding through packaging can create repeat purchases and brand loyalty.
📌 Example: Apple’s sleek product design & eco-friendly packaging create a premium feel, justifying higher prices.
🔹 3️⃣ Customer Service (Loyalty & Competitive Edge)
Firms invest in after-sales support, warranties, and personal customer interactions.
High-quality customer service reduces consumer uncertainty, making them more likely to choose a trusted brand.
This leads to repeat purchases and positive word-of-mouth marketing, lowering customer acquisition costs.
Firms can charge higher prices without losing demand, as consumers value service over just cost.
📌 Example: John Lewis’ excellent customer service and free returns policy encourage loyalty and premium pricing.
🔹 4️⃣ Provision of Complementary Products or Services (Enhanced Value Proposition)
Firms bundle products or offer additional services to enhance the overall customer experience.
This makes switching to competitors more difficult, increasing customer retention.
Bundling complementary products increases consumer surplus, leading to higher perceived value.
Firms generate additional revenue streams beyond the core product.
📌 Example: Microsoft Office comes bundled with Word, Excel, and PowerPoint, making it more attractive than buying alternatives separately.
