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ECON 340 Final Essay: Firm Behavior and Industry Organization

Final Essay

The purpose of this essay is to evaluate your learning this semester on firm behavior and industry organization in various competition environment, as well as their welfare consequence. You are expected to utilize your knowledge gained from this course to analyze a market that you have experience with.

The firm behavior and industry organization essay should be limited to 5 pages, 12-point font and double-spaced. All graphs should be properly labeled. Any formula, equation and numerical work should be edited and displayed properly.

Detailed instructions for the firm behavior and industry organization paper:

  • Choose a market under your observation. Examples include pizzeria in your area, cell phone service providers market, fast food restaurants, etc.
  • Described the market features and the competition level. Is the market dominated by a small number of large firms or does it consist of a large number of small firms? Do these competing firms offer identical/similar or differentiated products/services?Do you observe any firm interaction?
  • Which type of market structure do you think this market is categorized as?
  • Use what you have learned from this course regarding such market structure to proceed with your analyses graphically or numerically. You need to carefully address the following questions,and if applicable, differentiate short run vs. long run situations. ✓How do these firms set prices and output levels to maximize their profits?✓How does the market achieve an equilibrium status?
  • What do you think of the social welfare level achieved in this market, compared with what otherwise would be achieved under perfect competition? Do you identify any dead weight loss and is there any possible welfare gains? Please break down social welfare into consumer surplus and producer surplus for your evaluation.
  • Do you think this market should be regulated based on your welfare evaluation? Any extra information you may need to collect to reach a conclusion?



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