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mid206nans - Eco 171 - Industrial Organization Second...

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Eco 171 - Industrial Organization Second Midterm Exam Name : Section: Instructions There are 6 short questions and 2 problems, each worth 1/3 of the total points. Answer in the space provided (no need to use it all.) If necessary use the back of the page. For the short questions, don’t forget to explain your answer .DONTFORGETTOWRITEDOWNYOURNAME Part I. Short questions . 1. Consider two industries a and b. The f rst industry has twice the number of f rms of the second industry, but their Her f ndahl index is the same. Can you tell which industry is more competitive in the sense that their average price markups are lower? 2. Consider game 1 played in class with the di f erence that marginal cost is 0.2. Suppose q =1 / 2 . Would it make sense for a f rm to set its price equal to 1/2? Explain.
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3. In the Cournot model, the residual demand of a f rm is more elastic the larger is the output of the other f rms. True or False. Explain. 4.
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This note was uploaded on 04/13/2008 for the course ECON 171 taught by Professor Hopenhayn during the Fall '07 term at UCLA.

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mid206nans - Eco 171 - Industrial Organization Second...

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