Section -a q1

= (p – MR)/p [ At equilibrium, MC=MR]

= (p – p(1 – 1/e)) / p [ MR = p(1 – (1/e)) ]

= 1/e

, where e = numerical coefficient (e) of the price-elasticity of demand.

The smaller the price-elasticity of demand(e), the smaller would be the response of demand for the product in response to a change in its price and the larger would be the power of the monopolist to charge a price in excess of MC. In a perfectly competitive market, degree of monopoly power is 0 and in a perfectly monopolistic market is 1. In between these two extremes, the degree of monopoly powers will depend on the coefficient of price elasticity of demand.

Though Apple is the only player in the IOS premium, it does not have Monopoly in the Smartphone Market neither at the Global Level nor in the Indian Market. But strictly in the IOS segment and the apple app store, the company does have a monopoly. Following reasons support the statement:-

• 
  Apple’s market share in the global market as per 2016 was only 14.6% globally and in India it was 2.4 % between Q2 of 2015 and Q2 of 2016. As for an effective monopoly, a firm should have at least 90% market share, Apple does not qualify as a monopoly in both Global as well as Indian Market.
  
• 
  Since in the IOS device segment, Apple enjoys a market share of more than 90% and also the apple store is exclusively the property of Apple, it has the Monopoly in these areas.
  
• 
  When it comes to the overall Smartphone market, Apple is not the only firm involved in manufacturing smartphones. There are other big companies rivaling the market share of Apple like Samsung, BBK Electronics etc. So again it does not have a monopoly in Global Market as well as Indian Market.
  
• 
  Apple certainly has the power to regulate the price of its own product because there are no direct competitors in the IOS segment but there are options available in non-IOS segment and thus consumers are not bound to buy iPhone.