Problem 5 In this scenario, she can practice two-part pricing. For each group, the number of token will be equal to quantity demanded at price $2, which is the marginal cost of a drink. Number of tokens for students = 18 3( 2 ) = 12 , and the number
Problems on Second degree Price Discrimination 1. Problem #5 on page 129 at end of chapter 6 (4th edition) 2. Problem #6 on page 129 at end of chapter 6 (4th edition) 3. A monopolist is doing second degree price disrcimination and there are two group
Eco 171 - Industrial Organization Second Midterm Exam Instructions
Name: Section:
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
Eco 171 - Industrial Organization First Midterm Exam Instructions
Name: Section:
There are 6 short questions and 2 problems. Short questions are worth a total of 40 points and the problems a total of 60 points. Answer in the space provided (no need
Problems on Third degree price discrimination
1. An event in a stadium was sold out. While 60% of the participants paid full price, the other 40% paid only half price. Some people that were willing to pay more than half price were left out. Conclusio
Eco 171 - Industrial Organization Second Midterm Exam
Name: Section:
Instructions
There are 6 short questions and 2 problems. Short questions are worth a total of 40 points and the problems a total of 60 points. Answer in the space provided (no need
Schedule and requirements
Requirements: The course will have 2 midterms and a final exam. The final grade is computed as follows: weight Midterms (best of 2) Final exam 40% 60%
Exams: Midterm 1: Feb 2 Midterm 2: March 2 Final: Monday, March 15, 2010, 11:3
Concentration and Profitability
Assume that we have N firms with different marginal costs We can use the N-firm analysis with a simple change Recall that demand for firm 1 is P = (A - BQ-1) - Bq1 But then demand for firm i is P = (A - BQ-i) - Bq
Econ 171 - Industrial Organization Second Midterm Exam - 2009 Instructions
Name: Section:
There are 6 short questions and 2 problems. Short questions are worth a total of 40 points and the problems a total of 60 points. Answer in the space provided (no ne
Economics 101: Solution to Final Sample Questions
by Jiyeon
Written Questions
1.
QEW
QM S
MC
= 1600 50PEW
= 1500 100PM S
= AC = 3:5
a. Kasey cannot distinguish two markets.
3100
1600
Q = QEW + QM S =
Inverse demand is
62
3
P =
32
Q
150
Q
50
150P if P 15
5
Problems on Cournot and Bertrand competition 1. Suppose that an industry with 20 rms has a Herndahl index of 500. What can you conclude about the four-rm concentration ratio? Answer. If the Herndahl index is 500, it must be that all rms have the same
Industrial Economics=Econ 171 Lecture 1 George Stocking brilliant writer about Industrial Organization, "structure, conduct and performance" concentration George Stigler also a major writer, University of Chicago, against Stocking's work "Economic
1. A restaurant chain has to choose how many stores to open in a city. Assume it oers free delivery. Then it will open a socially excessive number of stores. True or false. Explain. 2. A monopolist can produce a low or high quality product. All consu
Problems on Second degree Price Discrimination 1. Problem #5 on page 129 at end of chapter 6 (4th edition) 2. Problem #6 on page 129 at end of chapter 6 (4th edition) 3. A monopolist is doing second degree price disrcimination and there are two group
Problems on Second degree Price Discrimination
1. For each group, the number of tokens will be equal to quantity demanded at price $2, which is the marginal cost of a drink. Number
of tokens for students qs = 18 3(2) = 12 , and the number of tokens for th
Problems on Third degree price discrimination
1. An event in a stadium was sold out. While 60% of the participants paid full price, the other 40% paid only half price. Some people that were willing to pay more than half price were left out. Conclusio
Problem 3 (a) The demand functions for the two consumer groups are
X 1 = 200 P if P 200 , and X 1 = 0 if P 200.
X 2 = 50 1 P if P 100 , and X 2 = 0 if P 100 2
First consider the case when P 200. In this case, X 1 = 0 and X 2 = 0 , implying X
Solution to Practice Midterm 2
SHI, Wei
Question 1: Cooltime and Airlite
Cooltime and Airlite produce the same product and share the market demand
= 800 50 . The inverse demand is = 16 /50. Both of them have
= = 4.
a. Cournot competition: for rm where =
Problems on Product Dierentiation
1. Two rms are Bertrand competitors in a dierentiated products market where goods
are (imperfect) substitutes. Suppose demand functions are linear in both prices. An
increase in rm B price increases the elasticity of dema
Monopoly: Linear pricing
Econ 171
1
Introductory remarks: use of market power
OPEC share of the oilmarket: 52 percent in 1973, about 40
percent currently
Owns 70% of reserves
Since 1973 managed to keep higher prices by restricting output
General question:
Price Discrimination and
Monopoly: Linear Pricing
Econ 171
1
The benefits of segmentation
Take example from last class:
P =100-Q and c =20
Result p =60, q =40, profits = 1600
Excluded consumers that are willing to pay more
than c
Suppose monopolist c
Concentration and Profitability
Assume that we have N firms with different marginal costs
We can use the N-firm analysis with a simple change
Recall that demand for firm 1 is P = (A - BQ-1) - Bq1
But then demand for firm i is P = (A - BQ-i) - Bqi
Equ
Oligopoly Models
Static vs. dynamic models
Characteristics of the markets
Homogeneous products
Differentiated products
Strategic considerations:
Decision variable role of prices vs. capacity choice
Cournot (capacity choice/quantities)
Bertrand (pr
Price-Fixing and
Repeated Games
ECO 171
1
Collusion and cartels
What is a cartel?
attempt to enforce market discipline and reduce competition
between a group of suppliers
cartel members agree to coordinate their actions
prices
market shares
exclusiv