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					                                      Exam 2 review
    study homework
    try problems at the end of each chapter and throughout the book

Chapter 8: Commodity Bundling and Tie-In Sales

   1. Know the difference between bundling and tie-in sales.
   2. Be able to provide/differentiate between these if given an example.
   3. Be able to mathematically calculate the optimal no bundle price, pure bundle price, and
      mixed bundle price. Be able to determine efficiency between these. You do not need to
      know those ABCD graphs. Recall, most of this is “trial and error” for optimal prices. Be
      sure you really understand when/why a mixed bundle is more efficient (who are you
      keeping from the bundle and why).
   4. Understand the basic relationship to tie in sales and our old friend the two part
      tariff/menu prices.

Chapter 9: Static Games and Cournot Competition

   1. Be able to interpret payoffs, strategies, best responses in static games.
   2. Be able to find/define dominant strategies.
   3. Be able to define/identify a prisoner dilemma game.
   4. Be able to solve for Nash Equilibria using best responses (with and without dominant
   5. Understand Cournot competition. Be able to mathematically solve for the Nash Equilbria
      (quantities and price) for a given demand curve and given marginal cost. Be able to show
      graphically best response functions.
   6. Be able to generalize to N firms.

Chapter 10: Price Competition

   1. Understand the Nash Equilibrium for the Bertrand game. Be able to solve for it
      mathematically (you will NOT have to graph here).
   2. Understand, conceptually, what capacity constraints are and how they impact the NE in
      the Bertrand game.

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