Guidelines for Second Assignment on Engg. & Managerial Economics This assignment is on Market Structure.

. Each group has to identify a product/service (e.g. Automobiles, Cement, Airlines, Mobile Handset etc.) for detailed analysis. We shall continue with the same groups as in Assignment 1. Identification of product/service is the responsibility of the group and each group will have to choose a distinctly different product/service. Access CMIE databases (PROWESS, IAS, EIS) for data analysis and report preparation. You may follow the following steps (indicative only):

PART 1 First, prepare a brief sectoral profile of the product/service incorporating key (physical and financial) performance indicators (KPIs) like production, sales, profitability, productivity, capacity utilization etc. A minimum of five years (up to 2010-11) data need to be compiled for this purpose. Second, analyze the market based on the following factors to assess the nature and extent of competition in market: 1. 2. 3. 4. 5. No of producers/ sellers Type of product (homogeneous or differentiated) Power of firm over price Barriers to entry (and exit) Non-price competition

Third, based on analysis, categorize the relevant market as perfectly competitive or imperfectly competitive (monopoly/monopolistic competition/oligopoly). PART 2 Compute various market concentration ratios (CR4, Herfindahl Index etc.) for the chosen product/service over a period: 1990-91 to 2010-11 and assess the trend. Compute various performance/ profitability ratios (e.g. PAT/Total Income, Advertisement Intensity, R&D Intensity etc.) for leading firms (say, top5 firms) for the same period (1990-91 to 2010-11). Examine whether performance/ profitability indicators are correlated with the market concentration ratios. Submit your Report (both Part 1 & Part2) on or before by August 27, 2011 by sending soft copies to utuchat@rediffmail.com. *****