Principles of Microeconomics

- 1 October 2020

Trade topics: Economics

Industrial organization is essentially a branch of applied microeconomics which seeks to understand the causes and effects of various market structures on pricing and product choices. The course focuses on the theory of the firm and the industry in imperfectly competitive markets with an emphasis upon oligopoly theory, but it also addresses empirical applications of the theory. The course explains how firms compete with each other; it models firms’ strategies on imperfect markets and derives the impact of firms’ behavior on welfare and market structures. Also, the course analyzes industrial policy and the WTO. Additionally, the effect of industrial revolution on climate change will be examined.
Participants will analyze market structure, firm conduct, and economic performance of industries.  Of special interest is firms' strategic behavior in price and non-price competition. The types of behavior, or conduct, include oligopoly pricing and production, strategic entry deterrence, location strategies, product differentiation, advertising, vertical and horizontal integration, and research and development. The effects of firms' conduct upon economic welfare and feedback effects upon market structure are examined. Of special interest, the dangers of an unregulated extractive monopoly on environment will be investigated. The course will analyze the acquisition and use of market power by firms, antitrust law or/and the role of government competition policy. It will investigate the objectives and instruments of industrial policy in a changing global context and also look at how institutions and industry can shape improvements in environmental quality and support efficient allocations of resources.