Econ 101 Lecture Notes
Monopoly 4
Edward Kung
January 14, 2014
1
Second degree price discrimination
Sometimes third-degree price discrimination is not possible because it is dicult to separately
identify two groups of customers. An alternative approach is

Econ 101, Week 6: Dont hate the player, hate the game
Colin Weiss
February 10, 2014
Sequential Move Games
*Sequential games are useful for studying games where players can see the actions of the
other players before making their decision. We should recogn

Uncertainty and Asymmetric Information
Econ 101, Sections 1I/1M, Week 10
Matt Miller
These will be the last notes of the term, but I will add to them as the nal approaches (in particular, I
will add a signaling question next week, as well as questions tha

Practice Problems 1
Edward Kung
January 6, 2014
1. (Linear demand and costs) A monopolist face market demand given by:
Q = 100 3P
and a cost function of:
C = 10 + Q
(a) Find the prot maximizing price and quantity. Calculate prot and consumer
surplus.
(b)

Practice Problem 2 Solutions
January 19, 2014
1.
(a) Not price discrimination
(b) Second degree
(c) Third degree
(d) Second degree
2. A = 3, P = 15, Q = 6.05, = 12.25
3.
(a) Q = 150, P = 70, = 6700, CSL = 1800, CSB = 450
(b) Business travelers would stop

Practice Problems 2
Edward Kung
January 10, 2014
1. (Price Discrimination Examples) Label the following practices as rst, second or third degree price discrimination (or not price discrimination)
(a) An airline charges fees for customers who check in bags

Practice Problem 1 Solutions
Hyo Sang Kim
January 15, 2014
1. Here, demand function is given by:
P =
100 1
Q
3
3
and a cost function is:
C = 10 + Q
(a) Prot maximization problem that monopolist faces is following:
max = P (Q)Q C(Q)
Q
=
100 1
Q Q (10 + Q

Practice Problem 2 Solutions
Hyo Sang Kim
January 20, 2014
2. The monopolist faces a demand curve
Q = (20 P )(1 + 0.1A 0.01A2 )
and a cost function is given by
C = 10Q + 15 + A
Lets think about what the monopolist can choose. Here, the choice variables ar

Practice Problem 1 Solutions
January 11, 2014
1.
(a) QM = 48.5, P M = 17.1667, M = 774.0833, CS M = 392.04
(b) QC = 97, P C = 1, C = 10, CS C = 1568.2
(c) DW L = 392.04
2.
(a) QM = 50, P M = 190, M = 4990, CS M = 1250
(b) QC = 66.667, P C = 173.333, C = 4

Sequential Games
Econ 101, Sections 1I/1M, Week 5
Matt Miller
This week well tie together some loose ends on the static, simultaneous move games we did last week and
transition into the games where the players make decisions conditional on the decisions o

Oligopoly
Econ 101, Sections 1I/1M, Week 7
Matt Miller
1
6.2 - Two Firm Dierentiated Product
Before computing the numerical solution to this problem, lets walk through the exercise we are doing at
a more general level. This will help clarify the procedure

Econ 101
Week 9 Practice Problems
March 1, 2014
1. (Probability Theory)
(a) Suppose you rolled one twenty sided dice, one ten sided dice, and two six
sided dice. What is the expected value of the sum of the dice rolls?
(b) Derive V ar [X] = E [X 2 ] E [X]

Economics 101, UCLA, Jernej Copic, Multiple-choice exercises, Public goods.
Text A. There is an economy of N aliens, indexed by i N , who live on a distant planet.
Person i initially possesses xi,0 cubic ounces of oxygen (aliens are very tiny). Alien i de

c
Copi, Ec101, Spring 2015, Final.
Wed, 06/10/2015, 1130am-230pm, Broad 2160E (A-Luo); Moore 100 (Lus-Z). Please arrive
at least 5min early.
There are 29 multiple-choice questions (5 are extra credit), each counts 1 point. Use the
blue book for your work

Week 4: Bertrand Model of Price Competition
Santiago Justel
October 19, 2015
1
Exercises
Exercise 1.1. We will review the concept and techniques related to Betrand Competition. As you know
this model consists on a oligopoly (for simplicity only two rms) a

Econ 101, Week 5: You Think This Is a Game?
Colin Weiss
February 2, 2014
Review of Game Theory Concepts
*What constitutes a strategy? As was mentioned in lecture, sometimes a strategy is a single
action, but in other cases it is an action that is continge

Econ 101: Week 2 Review
Colin Weiss
January 13, 2014
Monopoly Concepts
Before discussing in more detail how to derive the professors solutions to practice problem
set 1, it is useful to review a few key ideas about monopolies that were briey mentioned in

Econ 101, Week 3: Hate But Dont Price Discriminate
Colin Weiss
January 20, 2014
Review of Price Discrimination
*We should rst remind ourselves why a monopolist would want to price discriminate. Price
discrimination is protable if the total market demand c

Econ 101 Lecture Notes
Monopoly 3
Edward Kung
January 14, 2014
1
Price Discrimination
So far we have assumed that the monopoly charges only a single price for its product. In
some circumstances, the monopoly may increase its prots by charging dierent pric

Econ 101 Lecture Notes
Monopoly 2
Edward Kung
January 8, 2014
1
Monopoly and allocative eciency
In this lecture we will show how monopolies lead to inecient allocations. That is, in
a monopolized market, not all gains from trade are realized. In fact, we

Econ 101 Lecture Notes
Monopoly 1
Edward Kung
January 6, 2014
1
What is a monopoly?
A monopoly is a rm that acts as the sole supplier to a market. As we will see, the main
advantage that a monopoly has is that it can totally control either the price or th

Econ 101 Lecture Notes
Introduction: Perfect Competition and its
Departures
Edward Kung
January 6, 2014
1
A review of perfect competition
One of the cornerstones of modern economic thought is the idea that competitive
markets allocate resources eciently.

Econ 101 Lecture Notes
Imperfect Competition 1
February 8, 2014
1
Introduction
In this section of the course we will study markets with imperfect competition, in which
there is some competition, but not necessarily enough to drive price down to marginal c

Econ 101 Lecture Notes
Game Theory 4: Repeated Games
January 30, 2014
1
Introduction
So far we have studied only one-shot games; that is, games which are only played once.
But in reality, the same games are often played repeatedly over multiple time perio

Econ 101 Lecture Notes
Imperfect Competition 2
February 8, 2014
1
Introduction
In the previous lecture, we studied price competition and quantity competition in
models with identical products, using the Bertrand and Cournot models. In this lecture,
we wil

Econ 101 Lecture Notes
Game Theory 2: Static Games
Edward Kung
January 24, 2014
1
Matching Pennies, Games with No (Pure Strategy)
Nash Equilibria
In the previous lecture, all the games we analyzed had a Nash equilibrium. Prisoners
Dilemma had one, Battle

Econ 101 Lecture Notes
Game Theory: Static Games
Edward Kung
January 24, 2014
1
Introduction
Up to this point in the course, we have studied markets where there is only a single
supplier. A natural extension would be to ask what happens if there are two,

Econ 101 Lecture Notes
Imperfect Competition 4
February 14, 2014
1
Tacit Collusion
We will conclude our study of imperfect competition by considering how rms can
tacitly cooperate with each other to raise prots for everyone. Cooperation generally
involves