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RHODES UNIVERSITY DEPARTMENT OF ECONOMICS AND ECONOMIC HISTORY EXAMINATIONS: NOVEMBER 2006 ECO 416 (INDUSTRIAL ORGANISATION) Examiners:

Professor M. Holden Dr. T. E. Mutambara Marks: 100 Duration: 3 Hours

ANSWER THREE QUESTIONS. TWO (2) FROM SECTION A AND ONE (1) FROM SECTION B. ALL QUESTIONS CARRY EQUAL MARKS. USE A SEPARATE ANSWER BOOK FOR EACH QUESTION SECTION A Choose two (2) questions in this section) Question 1 Discuss the contributions of the following economists to industrial organisation (a) Coase, R (1937) (11 marks) (b) Hall, R. L. and Hitch, C (1939) (11 marks) (c) Mason, E. S. (1939) (11 marks) Question 2 (a) Clearly explain the Structure-Conduct-Performance (S-C-P) framework. Use a specific example to illustrate. (13 marks) (b) State and explain any four (4) reasons why one should be cautious in treating S-C-P relationships as a simple one-way causation. (20 marks) Question 3 Critically examine each of the following theories and its relevance (a) theory of contestable markets (b) game theory (c) evolutionary theory SECTION B Choose one (1) question in this section Question 4 Clearly explain three (3) ways which incumbent firms may use to discourage the entry of new rivals. (33 marks) Question 5 Clearly explain each of the following (a) the objectives of South Africas Competition policy (b) the Schumpeterian hypothesis (c) efficiency as a positive principle/positive concept

(11 marks) (11 marks) (11 marks)

(11 marks) (11 marks) (11 marks)

RHODES UNIVERSITY DEPARTMENT OF ECONOMICS AND ECONOMIC HISTORY EXAMINATIONS: JUNE 2007 ECO 416 (INDUSTRIAL ORGANISATION) Examiners: Professor M. Holden Dr. T. E. Mutambara Marks: 100 Duration: 3 Hours

ANSWER THREE QUESTIONS. TWO (2) FROM SECTION A AND ONE (1) FROM SECTION B. ALL QUESTIONS CARRY EQUAL MARKS. SECTION A Choose two (2) questions in this section Question 1 Critically examine Porters (1985) five forces model which analyses industrial structure and competition. Question 2 Using any three (3) relevant theoretical frameworks in industrial organisation, critically examine how different policy makers could come up with different and conflicting proposals on whether or not to deregulate a particular industry or market. Question 3 Examine the controversy surrounding what would or would not deter new entrants into a market. Use the contributions to the definition of a barrier to market entry by Bain (1956), Stigler (1968), Ferguson (1974), Fisher (1979) , and Von Weizsacker (1980) in your discussion. SECTION B Choose one (1) question in this section Question 4 Using specific examples, critically examine any five reasons why different industries have different levels of concentration. Question 5 Using the concept of efficiency in both normative and positive sense, critically examine how two firms involved in an identical economic activity (e.g. the production of textiles and clothing items), could come up with significantly different outcomes in terms of efficiency. END OF EXAMINATION

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