FACULTY OF MANAGEMENT AND COMMERCE

SCHOOL OF BUSINESS AND ENTERPRISE

DEPARTMENT OF ECONOMICS

Module Title: Economics for Competition Regulation

Module Code: ECF 625E

END OF MODULE ASSESSMENT 2021

 Answer all questions

 Answers to be submitted as one file
 1. Show and prove [mathematically (no numbers needed) and graphically]
that oligopoly market competition based on price leads to the same
outcome as perfectly competitive market. Make clear your
assumptions [which carry a third of the marks] [30]
Students expected to discuss the Bertrand model reaction functions; making
assumptions on
- Duopoly
- Competing on price
- Homogenous products
- Equal and constant marginal costs
Below content as guide
 2. It has been stated that “The Competition Commission of South Africa
made history on 1 June by prohibiting the sale of the country’s Burger
King franchise on public interest grounds.” Andrew Mizner 02/07/2021,
Available at: https://iclg.com/alb/16680-blocked-burger-king-sale-
shows-sa-competition-commission-power
2.1. As an informed Economics of Competition Regulation student
kindly discuss this case, ensuring you touch on the following aspects:
- Alignment of competition policy and competition law
- Implications on key market outcomes vs boardroom dynamics
- Any past case that could have been concluded the same way,
but did not

[30]
Students expected to:
-show understanding between competition policy and competition law—and
how law guided the outcome in this case
- the case has more to deal with ownership and not price, quantity and
quality aspects within the market
- any relevant example acceptable

3. Many shoppers do ‘window shopping’ before the actual shopping. When

the actual purchase occur, in more cases than not, such purchase may
occur at an outlet that the shopper had not visited during ‘window
shopping’. The retailers and suppliers of the products are fully aware of
this, so are the salespeople that graciously welcome all window
shoppers and take them through the various products and their
functionality. Such activities by shoppers, have serious implications on
competition, and economic outcomes of retailers [especially profit].
Discuss full providing examples. Ensure to include the following
- Assumptions about relationship among firms within the market
- Moral hazard
- Solution to the problem
- Nature of the products and its durability
- If durable product is considered, what is the best pricing advise
that you can make to the retailer, justify

[40]
The below content to guide
1. Student to identify it is about complementary services under vertical
integration of markets
2. To discuss and illustrate the outcome to a retailer- mainly what is the
costs and effect on profits
3. Common with durable products
4. Discuss intertemporal price discrimination of durable products