Part I (20 points)

1. Suppose D₀ and S₀are the initial demand and supply curves for solar electric panels. P₀^* and Q₀^* are respectively the initial equilibrium price and initial equilibrium quantity in the market for solar panels. A new technology reduces the cost of producing solar panels. Using comparative statics, analyze how the equilibrium price and equilibrium quantity in the market for solar panels will change as a resultof this new technology? Be sure to illustrate your answer with graph. (5 points)
2. Suppose D₀ and S₀are the initial demand and supply curves for tablets. P₀^* and Q₀^* are respectively the initial equilibrium price and initial equilibrium quantity in the market for tablets. Rapid economic growth over the last three years has substantially increased the disposable income of most households. Using comparative statics, analyze how the equilibrium price and equilibrium quantity in the market for tablets will change as a resultof the increase in disposable income. Be sure to illustrate your answer with graph. (5 points)

1. Suppose that a market with an inelastic supply curve experiences a shift to the right in the demand curve. Using comparative statics, analyze how the equilibrium price and equilibrium quantity in this market will change as a resultof the shift to the right in the demand curve. What is the magnitude of the change in the equilibrium price and equilibrium quantity? Be sure to illustrate your answer with graph. (5 points)

1. Suppose that a market with an inelastic demand curve experiences a downward shift in the supply curve (to the right). Using comparative statics, analyze how the equilibrium price and equilibrium quantity in this market will change as a resultof that shift in the supply curve. What is the magnitude of the change in the equilibrium price and equilibrium quantity? Be sure to illustrate your answer with graph. (5 points)

Part II (30 points)

Suppose an industry that has 10 firms. Below are the market shares for 2010 and 2015 of the 10 firms.

	Market Share
Firms	2010	2015
A B C D E F G H I J	26% 21% 16% 10% 9% 7% 4% 3% 2% 2%	23% 22% 19% 9% 8% 7% 6% 4% 1% 1%

1. Calculate the concentration ratio CR4 and the concentration ratio CR8 for 2010 and 2015

(5 points)

1. Calculate the Herfindahl-Hirschmann Index (HHI) for 2010 and 2015 (5 points)
2. Using the CR4, CR8, and HHI, analyze the evolution of the seller concentration in the industry. Has the industry become more or less concentrated? (10 points)
3. Using the CR4, CR8, and HHI, analyze the evolution of the potential market power of firms in the industry. (10 points)