INDUSTRIAL ECONOMICS
Question Paper 2009
Attempt any six questions.
1. a) What is the main difference between Microeconomics and Industrial Economics? How did Chicago School differ from the mainstream Industrial Economics? 4
b) Clearly distinguish between the linear and interactive Structure Conduct Performance (SCP) 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) Demsetz 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 Demsetz, 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 of X if inputs are used in variable proportions. 10
7. (a) Briefly discuss various measures of diversification. 4
(b) How does Reduction in financial risks acts as a motive for diversification 6
8. Write short notes on any two:
(i) Research as a special economic process
(ii) Group interdependence and consequence of diversification
(iii) Leibenstein critique of Williamson argument for mergers 5*2=10
INDUSTRIAL ECONOMICS
Question Paper 2008
Attempt any five questions.
1. Critically evaluate various concentration indices highlighting the appropriateness of each index in different market situations. Which index satisfies most of the criterions laid down by Hannah and Kay? 12
2. Given the Sylos Postulate, the limit price increases directly with the extent of scale economics. Explain. Discuss the possibility of entry below Minimum Efficient Scale. 12
3. When inventions lead to drastic cost reductions, incentive to invent is stronger for competitive industries. Discuss in the light of arguments given by Arrow and Demsetz? 12
4. If output X is produced by a competitive industry using two inputs A and B, where A is supplied by the monopolist and B is supplied competitively, does the monopolist have as incentive to take over production of X? 12
5. There are various consequences of diversification. Explain these effects clearly highlighting their impact on society. 12
6. Differentiate between the Scale Economies and Stochastic Approach to Concentration in industries. 12
7. Write short notes on any two:
(iv) Product Proliferation as entry barrier
(v) Mansfield theory of diffusion
(vi) Stigler’s Life Cycle Hypothesis 6*2=12
INDUSTRIAL ECONOMICS
Question Paper 2007
Attempt any five questions.
1. Define the concepts of basic conditions, market structure and performance with examples. Distinguish between two versions of S-C-P paradigm: with and without feedbacks. 12
2. Critically evaluate the contributions of Stigler, Demsetz and Bain in defining entry barrier. How is entry deterrence different from entry barrier? Can market power exist without government intervention? 12
3. Why do we need to measure concentration in a market? Analyse the merits and demerits of different measures of concentration? 12
4. Define diversification of a firm. Does it relate to market structure? Analyse the impact of diversification of a firm on consumers’. 12
5. Analyse the role of technological dependence and uncertainty in explaining vertical integration. 12
6. What are the characteristics of research activity? What problems do they lead to? 12
7. Explain the contribution of Williamson and Leibenstein to the analysis of horizontal mergers. Use diagrams. 12
8. Write short notes on any two:
(vii) Transaction cost
(viii) Berry’s index of diversification
(ix) Bounded rationality 6*2=12
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