{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Lecture25_MarketDef_VertIntegration_Econ121_Fall2010

Lecture25_MarketDef_VertIntegration_Econ121_Fall2010 -...

Info icon This preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Click to edit Master subtitle style  2/2/11 Lecture 25 Antitrust: Market Definition and Vertical Integration Econ 121: Industrial Organization UC Berkeley Fall 2010 Prof. Cristian Santesteban
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
 2/2/11 Hypothetical Monopolist Test
Image of page 2
 2/2/11 Own Price Elasticity Purpose of defining a relevant market is to identify market power Market power depends on the own price elasticity of demand
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
 2/2/11 Own and Cross Price Elasticities We know that the profit-maximizing condition for a firm with market power is Lerner Index = 1/εii, where εii is the firm’s own-price elasticity of demand A cross-price elasticity, εji, only captures the substitution to another product j but not the full reduction in demand for the product in question i.
Image of page 4
 2/2/11 Own and Cross Price Elasticities Cross price elasticities are useful in determining which products should be considered reasonable substitutes.
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern