ECON 325, IO (Fall 08)
Christoph Luelfesmann, SFU
December 10, 2008
Final Exam Econ 325
Please answer all of the questions below.
Shorter Questions [50 points]
1. Consider a spatial model of price competition. What is the equilibrium eect of
higher transp
ECON 325, IO (Fall 08)
Christoph Luelfesmann, SFU
October 16, 2008
Midterm Exam Econ 325
Please answer all of the questions below.
Shorter Questions [30 points]
1. What is the denition of Pareto eciency? Using this denition, show precisely
why the standar
Chapter 18: Nonprice Vertical Restraints
Learning Objectives
Students should learn to:
1. Differentiate between exclusive selling and exclusive territories and will be able to
explain motivations for each.
2. Explain why exclusive dealing may lead to redu
Chapter 23: Auctions and Auction Markets
Learning Objectives
Students should learn to:
1. Distinguish between a private value auction and an auction in common values.
2. Explain the different auction mechanisms:
a. Ascending-bid (English) v. descending-bi
ECON 325, IO (Fall 2011)
Christoph L
ulfesmann, SFU
Homework Assignment #3
1.) Please solve Problem 5, p. 221 PRN.
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2.) There are two industries A and B, and each industry is a duopoly. The
firms in
Chapter 3: Market Structure and Market Power
Learning Objectives:
Students should learn to:
1.
Explain the following measures of structure, how they are used to categorize various
industries, and some of the shortcomings of the measures.
a. Concentration
Chapter 17: Vertical Price Restraints
Learning Objectives
Students should learn to:
1. Explain why firms integrate, why firms contract, and why firms choose to buy and sell on
the open market.
2. Explain why some industries are characterized by more forma
Chapter 6: Price Discrimination and Monopoly: Nonlinear Pricing
Learning Objectives:
Students should learn to:
1. Differentiate the three types of price discrimination.
2. Explain graphically, in words, and algebraically how a monopolist can extract surpl
Chapter 24: Strategic Commitments and International Trade
Learning Objectives
Students should learn:
1. The concept of commitment in making threats or promises.
2. Full understanding of the effects of trade barriers:
a. Tariffs
b. Subsidies
c. The effects
Chapter 13: Predatory Conduct: More Recent Developments
Learning Objectives:
Students should learn to:
1. Differentiate predatory conduct, predatory pricing, and limit pricing.
2. Compare the potential returns from predation and from merger and analyze th
Chapter 14: Price Fixing, Repeated Games, and Antitrust Policy
Learning Objectives:
Students should learn to:
1. Explain why firms often prefer to work together instead of competing as in noncooperative oligopoly models.
2. Understand the various laws out
Chapter 17: Vertical Price Restraints
Learning Objectives
Students should learn to:
1. Explain why firms integrate, why firms contract, and why firms choose to buy and sell on
the open market.
2. Explain why some industries are characterized by more forma
Chapter 12: Entry Deterrence and Predation
Learning Objectives:
Students should learn to:
1. Define and give examples of predatory conduct.
2. Explain stylized facts about the entry of firms into industries.
3. Define and use the concept of residual deman
Chapter 15: Horizontal Mergers
Learning Objectives
Students will learn to:
1. Explain the reasons behind mergers. Some of these have to do with increased efficiency
and reduced costs of production and marketing. Others relate to the ability to enhance
pro
Chapter 21: Patents and Patent Policy
Learning Objectives
The students will learn to
1. Discuss the issues involved in determining the optimal breadth of a patent.
2. Use data on market demand, marginal production costs and the probability of research
suc
Chapter 22: Network Issues
Learning Objectives
Students should learn to:
1. Find the optimal pricing strategy for a monopolist with a network externality in the
demand for its product. The student will be able to explain the idea of low and high level
equ
Chapter 22: Network Issues
Learning Objectives
Students should learn to:
1. Find the optimal pricing strategy for a monopolist with a network externality in the
demand for its product. The student will be able to explain the idea of low and high level
equ
Chapter 9: Static Games and Cournot Competition
Learning Objectives:
Students should learn to:
1. The student should understand the ideas of strategic interdependence and reasoning
strategically and be able to apply them to economic models of market behav
Chapter 7: Product Variety and Quality under Monopoly
Learning Objectives:
Students should learn to:
1. Distinguish vertical from horizontal product differentiation.
2. Interpret physical space and distance as distance in product space in defining a spati
ECON 325, IO (Fall 2011)
Christoph Luelfesmann, SFU
Answer Key to Assignment #2
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1.) Please answer Problem 1, p.109. In your answer, focus on 1rd and 3rd
degree price discrimination. Short but preci
ECON 325, IO (Fall 2011)
Christoph Luelfesmann, SFU
December 17, 2011
Final Exam Econ 325 Answer Key to LP1 a-b
Long Problem 1 [30 points]
Consider two rms, A and B.
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a) Each rm A and B can deliver
ECON 325, IO (Fall 2011)
Christoph Luelfesmann, SFU
Answer Key to Assignment #1
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1.) Please answer Problem 3, p. 43 in the book by Pepall-Richards-Norman
(PRN).
Answer: Easy to find out, and the tex
Chapter 15: Horizontal Mergers
Learning Objectives
Students will learn to:
1. Explain the reasons behind mergers. Some of these have to do with increased efficiency
and reduced costs of production and marketing. Others relate to the ability to enhance
pro
Chapter 16: Vertical and Conglomerate Mergers
Learning Objectives:
Students should learn to:
1. Apply the complementary goods model to the analysis of vertical mergers.
2. Demonstrate the idea of double marginalization and its impact prices, profits, and
Chapter 20: Advertising, Market Power, and Information
Learning Objectives
Students should learn to:
1. Identify several ways in which advertising increases the demand for a product:
a.
Differentiates the product from substitutes so that a better match be
Chapter 5: Price Discrimination and Monopoly: Linear Pricing
Learning Objectives:
Students should learn to:
1. Define and explain the differences between uniform pricing and price discrimination.
2. Explain the conditions that must exist for a firm to pra
Chapter 14: Price Fixing, Repeated Games, and Antitrust Policy
Learning Objectives:
Students should learn to:
1. Explain why firms often prefer to work together instead of competing as in noncooperative oligopoly models.
2. Understand the various laws out
Chapter 11: Dynamic Games and First and Second Movers
Learning Objectives
Students should learn to:
1. Extend the reaction function ideas developed in the Cournot duopoly model to a model of
sequential behavior due to Stackelberg.
2. Explain the differenc
Chapter 21: Patents and Patent Policy
Learning Objectives
The students will learn to
1. Discuss the issues involved in determining the optimal breadth of a patent.
2. Use data on market demand, marginal production costs and the probability of research
suc
Chapter 20: Research and Development
Learning Objectives
Students should learn to:
1. Explain why technological progress is so important for society.
2. Explain the Schumpeterian hypothesis. Ideas include:
a) Price competition is secondary to competition
Chapter 12: Entry Deterrence and Predation
Learning Objectives:
Students should learn to:
1. Define and give examples of predatory conduct.
2. Explain stylized facts about the entry of firms into industries.
3. Define and use the concept of residual deman
Chapter 10: Oligopolistic
Price Competition
Learning Objectives
Students should learn to:
1. Understand the logic behind the Bertrand model of price competition, the idea of
discontinuous reaction functions, how to solve a simple Bertrand duopoly model, a
Chapter 20: Advertising, Market Power, and Information
Learning Objectives
Students should learn to:
1. Identify several ways in which advertising increases the demand for a product:
a.
Differentiates the product from substitutes so that a better match be
Chapter 20: Research and Development
Learning Objectives
Students should learn to:
1. Explain why technological progress is so important for society.
2. Explain the Schumpeterian hypothesis. Ideas include:
a) Price competition is secondary to competition