# Module 3 Assignments

Majority of the Work is already done for Case 3. Calculations and some of questions 1 and 2 will uploaded. Just please add 3 sources for each assignment and the finishing touches to make it better for case study. Use at least one source from Background.

For SLP, it needs to be minimum of 3 pages

# Module 3 – Case

## MARKET STRUCTURE AND GAME THEORY

### Assignment Overview

As always, make sure to thoroughly review the required background materials before starting the assignments. The assignment questions will require you to do some calculations and also apply the concepts from the module. Question 3 differs from previous assignments in that you have to use an online simulation tool; but this activity should be a fun break from the standard numerical problems you have been doing.

### Case Assignment

1. For this problem use the Herfindahl Index to compute market concentration:
1. Suppose Apple has 45% of the U.S. market share for smartphones, followed by Samsung with 30%, LG with 9%, Motorola with 8%, HTC with 6%, and Nokia with 2%. What is the Herfindahl Index for the smartphone industry based on these numbers? Based on the Herfindahl Index, do you think the government would be willing to approve a merger between Apple and Samsung?
2. Now suppose Nokia and Motorola come out with a new smartphone that takes away a huge chunk of market share from Apple and Samsung. The new market shares are 25% for Apple, 20% for Samsung, 20% for Motorola, 20% for Nokia, 10% for LG, and 5% for HTC.
2. Use what you learned about perfect competition, monopoly, and oligopoly to answer these questions:
1. In the table below is the quantity produced, the price, the fixed costs, and variable costs for a perfectly competitive firm that faces a constant price of \$150 for its product regardless of the quantity it sells. Use the information in the first four columns to calculate the number for the last four columns. At what quantity should they produce based on what you find with your results?
2. How do you think your answer might change if it became a monopolist with all of its competitors leaving the market? Or if it became an oligopoly with only one or two competitors?
 Quantity Price Fixed Cost Variable Cost Total Cost Marginal Cost Total Revenue Profit/ Loss 0 150 200 – – 1 150 200 \$140 2 150 200 \$240 3 150 200 \$320 4 150 200 \$410 5 150 200 \$520 6 150 200 \$650 7 150 200 \$810 8 150 200 \$1,010 9 150 200 \$1,310 10 150 200 \$1,710

Go to the following webpage and test out some of your potential price strategies:
http://www.gametheory.net/Mike/applets/PDilemma/Pdilemma.html

The strategy “defect” indicates lowering your prices. The strategy “cooperate” means keep prices the same. Try out different strategies, such as cooperating all the time or defecting sometimes. There are five different rounds of this game, each with a competitor with different personalities and different strategies. Play all five rounds and experiment with different strategic approaches. Report your scores for each round, and discuss which strategies seemed to work the best for you.

### Assignment Expectations

• Answer the assignment questions directly.
• Stay focused on the precise assignment questions. Do not go off on tangents or devote a lot of space to summarizing general background materials.
• For computational problems, make sure to show your work and explain your steps.
• For short answer/short essay questions make sure to reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 11-14 on in-text citations. Another resource is the “Writing Style Guide,” which is found under “My Resources” in the TLC Portal.

## Rubric Name: MBA/MSHRM/MSL Case Grading Rubric for Quantitative Business Courses -Timeliness v1

Criteria Level 4 – Excellent Level 3 – Proficient Level 2 – Developing 19 points Demonstrates mastery covering all key elements of the assignment in a substantive way. 18 points Demonstrates considerable proficiency covering all key elements of the assignment. 17 points Demonstrates partial proficiency covering all key elements of the assignment. 16 points Demonstrates limited or poor proficiency covering all key elements of the assignment. 10 points Demonstrates mastery in presenting quantitative information in a format appropriate for the discipline. Supporting computations are relevant and accurate. 9 points Demonstrates considerable proficiency in presenting quantitative information in a format appropriate for the discipline. Supporting computations are mostly relevant and accurate. 8 points Demonstrate partial proficiency in presenting quantitative information in a format appropriate for the discipline. Supporting computations are not necessarily relevant and somewhat misleading. 7 points Demonstrates limited or poor proficiency in presenting quantitative information in a format appropriate for the discipline. Supporting computations are not relevant, misleading or absent. 10 points Analyzes quantitative and qualitative information as the basis for deep and thoughtful discussion, drawing insightful, carefully qualified conclusions from this work. 9 points Analyzes quantitative and qualitative information as the basis for competent and thoughtful discussion, drawing reasonable and appropriately qualified conclusions from this work. 8 points Analyzes quantitative and qualitative information as the basis for workmanlike (without inspiration or nuance, ordinary) discussion, drawing plausible conclusions from this work. 7 points Analyzes quantitative and qualitative information as the basis for tentative or limited discussion; and is hesitant or uncertain about drawing conclusions from this work. 6 points Demonstrates mastery and proficiency in written communication to an appropriately specialized audience. 5 points Demonstrates considerable proficiency in written communication to an appropriately specialized audience. 4 points Demonstrate partial proficiency in written communication to an appropriately specialized audience. 3 points Demonstrates limited or poor proficiency in written communication to an appropriately specialized audience. 5 points Assignment submitted on time or collaborated with professor for an approved extension on due date. 3 points Assignment submitted 1-2 days after module due date. 2 points Assignment submitted 3-4 days after module due date. 0 points Assignment submitted 5 or more days after module due date.

# Module 3 – Background

## MARKET STRUCTURE AND GAME THEORY

To start with, take a look at this short animated video that will introduce you to the basics of market structure:

McGlasson, M. (2009). Episode 25: Market structures. https://www.youtube.com/watch?v=9Hxy-TuX9fs&list=PLr6g_xbkz_0u_cINHBVW1ZuEpozKk2XGx

Now read Chapters 9 and 10 from the following book for more detail on these topics. In particular, pay attention to the numerical examples and the “Self-Check Questions” at the end of each section.

Taylor, T. (2014) Microeconomics. OpenStax College. http://cnx.org/contents/6i8iXmBj@10.174:WXgRcPaN@10/Introduction-to-a-Monopoly

Finally, read this slightly more advanced chapter. Pay special attention to the sections at the end on game theory and the “Policy Response to Oligopoly” section that covers the Herfindahl index:

Beveridge, T. M. (2013). Chapter 8: Between perfect competition and monopoly. A Primer on Microeconomics. [New York, N.Y.] [222 East 46th Street, New York, NY 10017]: Business Expert Press.

# Module 3 – SLP

## MARKET STRUCTURE AND GAME THEORY

1. What market structure is there for this line of business in your home town? Is this a monopoly, oligopoly, monopolistic competition, or perfect competition? Justify your answer using both your own research on this type of business in your home town, and by referencing some of the required background readings on different types of market structures.
2. Now that you have examined market structure of your chosen industry in your home town, do some research on IBIS World on market structure in this industry nationwide. You can access IBIS World by going to the main TLC Portal and clicking on “Additional Library Resources”. A link to IBIS World will come up. This direct link might also work if you are already logged onto the Trident online library. What information could you find regarding how concentrated or how competitive this industry is?
3. Based on the information you found for Question 2, what market structure do you think best describes this industry nationwide? Is this a monopoly, oligopoly, monopolistic competition, or perfect competition? Explain your answer using both information from IBIS World and the concepts from the required background readings.

### SLP Assignment Expectations

• Answer the assignment questions directly.
• Stay focused on the precise assignment questions. Do not go off on tangents or devote a lot of space to summarizing general background materials.
• Make sure to use reliable and credible sources as your references. Articles published in established newspapers or business journals/magazines are preferred. If you find articles on the Internet, make sure they are from a credible source.
• Reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 11- 14 on in-text citations. Another resource is the “Writing Style Guide,” which is found under “My Resources” in the TLC Portal.

## Rubric Name: MBA/MSHRM/MSL SLP Grading Rubric for Quantitative Business Courses -Timeliness v1

Criteria Level 4 – Excellent Level 3 – Proficient Level 2 – Developing 9 points Demonstrates mastery covering all key elements of the assignment in a substantive way. 8 points Demonstrates considerable proficiency covering all key elements of the assignment. 7 points Demonstrates partial proficiency covering all key elements of the assignment. 6 points Demonstrates limited or poor proficiency covering all key elements of the assignment. 7 points Demonstrates mastery in presenting quantitative information in a format appropriate for the discipline. Supporting computations are relevant and accurate. 6 points Demonstrates considerable proficiency in presenting quantitative information in a format appropriate for the discipline. Supporting computations are mostly relevant and accurate. 5 points Demonstrate partial proficiency in presenting quantitative information in a format appropriate for the discipline. Supporting computations are not necessarily relevant and somewhat misleading. 4 points Demonstrates limited or poor proficiency in presenting quantitative information in a format appropriate for the discipline. Supporting computations are not relevant, misleading or absent. 6 points Analyzes quantitative and qualitative information as the basis for deep and thoughtful discussion, drawing insightful, carefully qualified conclusions from this work. 5 points Analyzes quantitative and qualitative information as the basis for competent and thoughtful discussion, drawing reasonable and appropriately qualified conclusions from this work. 4 points Analyzes quantitative and qualitative information as the basis for workmanlike (without inspiration or nuance, ordinary) discussion, drawing plausible conclusions from this work. 3 points Analyzes quantitative and qualitative information as the basis for tentative or limited discussion; and is hesitant or uncertain about drawing conclusions from this work. 5 points Demonstrates mastery and proficiency in written communication to an appropriately specialized audience. 4 points Demonstrates considerable proficiency in written communication to an appropriately specialized audience. 2 points Demonstrate partial proficiency in written communication to an appropriately specialized audience. 0 points Demonstrates limited or poor proficiency in written communication to an appropriately specialized audience. 3 points Assignment submitted on time or collaborated with professor for an approved extension on due date. 2 points Assignment submitted 1-2 days after module due date. 1 point Assignment submitted 3-4 days after module due date. 0 points Assignment submitted 5 or more days after module due date.