BUSINESS ECONOMICS III Semester 2009 PAPER XI INDUSTRIAL ECONOMICS
Time: 3Hours Maximum Marks: 60
Attempt any six questions. All questions carry equal marks.
1. (a) What is the main difference between Microeconomics and Industrial Economics? How did Chicago School of thought differ from mainstream Industrial Economics? (4)
(b) Clearly distinguish between the linear and interactive Structure Conduct Performance framework to study Industrial behaviour. (6)
2. In contrast to determinate emphasis on equilibrium concentration level, the stochastic approach focuses on the problem of actual concentration change. Explain. (10)
3. How do Absolute Cost Advantage and Economies of Scale act as a source of barriers to entry? (10)
4. (a) Demstez argued that an inventor supplying a monopolist will have a greater incentive to invent if he is not constrained to charge the same per unit royalty to both the monopoly and competitive industry. Comment. (5)
(b) According to Demstez, what happens if we compare industries of equal size in case of drastic cost reduction. (5)
5. How Coase and later Williamson did developed the market failure consideration for vertical integration. (10)
6. Output X is produced by a competitive industry using two inputs A and B. A is supplied by a monopolist while B is supplied competitively. Does the monopolist A has an incentive to take over production to X if inputs are used in variable proportions. (10)
7. (a) Briefly discuss various measures of diversification. (4)
(b) How does Reduction in financial risk acts as a motive for diversification? (6)
8. Write short notes on any two:
(a) Research as a special economic process
(b) Group interdependence and consequence of diversification
(c) Libenstein’s critique of Williamson argument for mergers (5*2=10)
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