Econ 30100
Intermediate Microeconomic Theory
Additional Consumer Choice Problems
1. A consumer's utility over bundles consisting of goods 1 and 2 is U (q1 , q2 ) 4 q1 q2 .
a. For this utility function, derive the formula for each marginal utility and for
Oligopoly Pricing in Homogeneous Good Markets
Basic Question:
How are prices and quantities determined when a small number of firms
compete?
For now, well look at markets where firms produce a homogeneous
(i.e., identical) product?
Examples: crude oil, g
Lecture on Oligopoly Competition in Homogenous Good
Markets
February 2011
1
Introduction
An industry with a small number of competing firms (greater than 1), where small means
that the decisions of each firm have nonnegligible effect on the others so that
The RAND Corporation
Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes
Author(s): David M. Kreps and Jose A. Scheinkman
Source: The Bell Journal of Economics, Vol. 14, No. 2 (Autumn, 1983), pp. 326-337
Published by: The RAND Corporati
Oligopoly Pricing in Differentiated Good Markets
Most markets are differentiated product markets: products of different
firms are not perfect substitutes.
Our models of these markets are among the most realistic and useful of
all models in IO. They provid
Connecting Theory to Data
1. Pose an economic question.
2. Build-up model of demand from consumer utility maximization ala
Hotelling.
3. Connect model to data via econometrics to answer the question.
Task: Write-down a model which captures above and can
b
Mergers
Merger: The process in which two or more independently owned firms
join under the same ownership.
I
Includes takeover, integration or acquisition
I
May affect internal governance of the firm
We distinguish between horizontal and vertical mergers.
Oligopoly Pricing in Differentiated Markets
March 2012
1
Introduction
Products produced by different firms are often differentiated by their characteristics or attributes. A useful classification is to distinguish between horizontal and vertical different
Sequential and Repeated Games
April 2011
1
Introduction
In this lecture, I want to discuss the impact of repeated interaction on the behavior of firms.
In order to do so, we need to develop and master some more tools from game theory. I begin
by discussin
Horizontal Mergers
April 2011
Horizontal mergers occur when the firms joining together are formerly competitors in the
same product market. An example is the merger between AT&T and Cingular, who were
previously competing against each other in the market
Demand Estimation
March 2014
1
A Model of (Horizontally) Differentiated Goods
Instead of beginning with some assumption about demand curves, we will start with consumer utility functions as in the Hotelling model. The standard approach in economic theory
Sequential and Repeated Games
I
Can firms that interact repeatedly escape the Bertrand trap?
I
Can repeated interaction also enable firms to collude (i.e., escape
the Prisoners Dilemma)?
Movating Case: E.I. Du Pont and Ethyl Corp vs. FTC (1984)
The Market
ECON 40580
Thurk
Problem Set 6: Mergers (Due April 5, 2017)
Directions: Complete the problems presented below. You may work on this problem set with others but must write
your own solutions. Your solutions are due at the beginning of class on the date abo
ECON 40580
Thurk
Problem Set 7: Entry Deterrence and Accommodation (Due April 26, 2017)
Directions: Complete the problems presented below. You may work on this problem set with others but
must write your own solutions. Your solutions are due at the beginn
Price Discrimination
Single-price monopolist leaves some gains from trade on the table.
Objectives of this lecture are:
I
Discuss more sophisticated pricing strategies that firms use to obtain
these gains.
I
Discuss the welfare implications of these strat
Bundling and Tying
Definitions:
A pure bundling strategy is when the monopolist offers to sell units of
two commodities, 1 and 2, only as a bundle at a price P12 .
A mixed bundling strategy is when the monopolist offers to sell a unit of
product 1 alone a
Lecture on Price Discrimination
January 2013
1
Introduction
The objectives of this lecture are (i) describe various kinds of pricing schemes that firms
employ to reduce the deadweight loss and (ii) to consider the welfare implications of these
schemes. Pr
Econ 30010
Intermediate Microeconomic Theory
Consumer Behavior Summary and Outline
This topic will focus on how prices, income, and tastes and preferences influence how
much a consumer spends on each available product and service. The analysis will not on
Econ 30010
Intermediate Microeconomic Theory
Additional Cost Problems
Production Functions to be used in the following problems.
A. q = 50 L1/4 K1/5
B. q = KL+L2
C. q = 75LK
D. q = 30L1/3 K2/3
E. q = 4L + 3K
1. Cost Minimization
Find the cost minimizing i
Econ 30010
Intermediate Microeconomic Theory
Risk Summary and Outline
So far we have studied how prices, income, and preferences affect consumer choices.
This analysis assumed that we know the outcome of all our decisions with certainty. In reality,
the o
1
DO NOT OPEN THIS TEST BOOKLET UNTIL YOU ARE
INSTRUCTED TO BEGIN
Econ 30010
Intermediate Microeconomic Theory
Midterm 1, Spring 2014
Instructions:
1) You may use a pen or pencil, a hand-held nonprogrammable, non-graphing calculator, and a
ruler or straig
Lecture 1: Preliminaries
January 22, 2013
The purpose of this lecture is to review some basic concepts of microeconomics that we will be using
throughout the course.
1
Review of Cost Concepts
In the following discussions the rms technologies as well as th
Lecture 2: Regulation of a Monopoly
January 22, 2013
1
Monopoly
The objectives of this lecture are to describe: (1) the simple of model of monopoly pricing for
a perishable good and rationale for regulation, (2) methods of regulation when the regulator
kn
ECON 40580
Thurk
Math Review
Directions: Complete the problems presented below.1 Work on this review by yourself.
1. Solve the following system of equations:
9y 4x = 14
2x + 3y = 15
2. Solve the following system of equations for x and y:
a1 x + a2 y = a3
ECON 40580
Thurk
Answers for the Math Review (Due Jan 17, 2013)
Directions: Complete the problems presented below.1 Work on this review by yourself.
1. Solve the following system of equations:
9y 4x = 14
2x + 3y = 15
Answer:
Solve for x in the second equa
SYLLABUS FOR INDUSTRIAL ORGANIZATION (ECON40580)
Spring 2017
Prof. Jeff Thurk
919 Flanner Hall
Phone 574-631-3083
email: [email protected]
Office Hours: Tuesdays 2-5 and by appointment
Meetings
MW 2:00-3:15, DeBartolo 210
Optional Texts
Industrial Organizatio
Review of Cost Concepts
Review of Cost Concepts
C (y ) = minimal expenditure required to produce output y .
Two components: fixed costs F , and variable costs V (y ).
C (y ) = F + V (y )
I
Fixed costs do not vary with output.
I
Variable costs increase wit
Managerial Economics Test 3 Study Guide
1. Chapter 7: Perfect Competition
a. Characterized by managers having no market/pricing power, firms are price takers in this
environment
i. Demand curve for any single firm is essentially horizontal
ii. In the long
Managerial Economics Final Study Guide
1. Chapter 1: Introduction
a. Economic Profit generated by the actions of managers
b. Principal-Agent Problem separation of management & ownership in firms in firms,
managers may choose to further their own interests
Lecture on Bundling and Tying
February 2011
In the previous lecture, we examined various strategies that monopolists employ in which
different consumers end up paying different prices for the same commodity. In this lecture,
we study how multi-product mon