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Unformatted text preview: with market power (i.e. with arbitrary demand and cost functions) as well as specific companies that possess, or assumed to possess, total market power. Here are some examples we’ll see in this and the next chapter: Example 1: Prestige Data Services – Commercial Data Services ● Hours ● = $/hour , ⏟ Example 2: Intel and AMD PC CPU (Source: Hugo Salgado) ● Quantity of CPUs (millions) ● = $/CPU Example 3: Diet Variety of Brand X soda sold in seven stores of a supermarket chain over 52 weeks ● Quantity of diet brand X soda in a store in a week (ozs.) ● = $/oz. ⏟ oz_X Mean oz_Y Price_X Price_Y 8315.60 8960.04 0.027965 0.028601 20 ECO 204 Chapter 16: Analysis of Firms with Market Power (this version 2012-2013) University of Toronto, Department of Economics (STG). ECO 204, S. Ajaz Hussain. Do not distribute. Example 4: Coke and Pepsi Concentrate Syrup7 ● ● = real price of syrup ● = real income ● = quarterly quantity of syrup sold = square root of quarterly real advertising expenses ● { All pecuniary variables are in terms of 1986 dollars ● ● ̅̅̅ ● ̅̅̅ ● ̅...
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This document was uploaded on 01/19/2014.

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