The fact that Microsoft designs new versions of Windows to be compatible with software developed for older versions allows it to sustain higher prices for the new versions because:

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Compatibility ensures consumers perceive the new Windows version to be differentiated from the preceding one.

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Older software is more valuable to Windows users than newer software.

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It benefits from positive network effects or externalities based on the existing software catalogue.

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Consumers upgrading to the new version of Windows gain compatibility with existing applications, a feature missing in older versions.

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The fact that Microsoft designs new versions of Windows to be compatible with so...

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