Microsoft did cut the price of Windows to get people to adopt it early on because they would be making so much money from Office.
Microsoft Word vs. WordPerfect, Excel vs. Quattro Pro and Lotus 1-2-3. These battles were won because of Windows and that cemented their position as industry leader.
Now that Microsoft is in a dominant position they don't cut the price of Windows as much, but to remain on top they do give the OEMs a very sweet per-unit deal they really can't refuse.
If that's true (and that's not my understanding) they did it to gain marketshare and maximize profit, not because they already had enough profit. In that scenario, they cut the price of Windows to make even more from Office.
Republicans argue for "free-market solutions" which are actually government granted or encouraged monopolies where no competition exists.
There lots of examples of free market capitalism making the world a better place and markets failing as well. There are examples government run services providing great consistent services and there are examples of government bureaucracies soaking up budget and graft in their own or lobbyists interest.
Which tool do you think will work best in this situation and why? How do you plan to deal with the inherent problems of government involvement in ISP regulation?
I'm just tired of "free market solves all" vs "corporation are evil, government is universal solution". We learn nothing and convince no one.
It's a very important point; this false argument is often used. In truth, in the marketplace, goods are not priced at 'cost-plus'; i.e., they aren't priced by taking the cost to the vendor and adding a profit margin.
Goods are priced at the point that will maximize profit for the vendor; economists would say at the point that maximizes marginal profit. Colloquially, they charge as much as they can.
The fact that the vendor has another stream of income from Product B doesn't cause them to reduce their prices for Product A. Microsoft doesn't cut the price of Windows because they are making so much from Office.