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Industrial Organization
Quiz 5
Market Structure And Market Power
Table 1 reports the sales in number of units of the top 10 selling sedan cars.
Table 1: Sedan Sales in 2014
1 Toyota Corolla 27,357
2 Toyota Camry 26,763
3 Nissan Altima 26,408
4 Honda Accord 21,011
5 Ford Fusion 19,694
6 Honda Civic 18,699
7 Chevrolet Cruze 18,693
8 Ford Focus 18,478
9 Nissan Sentra 14,395
10 Chrysler 200 14,157
Suppose the market consist only on the cars in the above table and assume each car is
produced by a different company.
(a) Compute the market share of each company.
(b) Compute C2 and C4.
(c) Compute H.
(d) Are the results consistent with the symetric solution of the homogeneous good Cournot
model? Why or why not? Explain.
(e) Suppose firms above compete in an homogeneous product Cournot competition and differ
only according to marginal costs. Explain which firm is likely to have the highest marginal
cost and which the lowest.
