Econ. 359: Industrial Organization
Spring 2008

Problem Set Number 2

Due January 30, 2008


The next time you purchase gasoline, obtain aswers to the following questions about the gas station and its nearby competitors. If you do not buy gasoline during the next week, select a station near your home or that you pass by frequently.

1. Questions about industry structure:

a. What brand of gasoline is sold at the station?

b. Does the station obtain its unleaded regular gasoline from a company-owned refinery? If not, from what oil company does the station buy its gasoline?

c. Who owns the station? Is the station owned by the oil company whose brand is sold, a franchise from the oil company, or an independent firm (i.e., Fred Meyer, independent proprietor, etc.)

d. How far away is the closest gasoline station located on the same side of the street or road? How far is the closest station located on the opposite side of the street. Can either of these stations be easily seen from your selected station?

2. Questions about conduct:

a. Which of the following products does the station sell besides gasoline and oil?
 full service gas pumping
 car wash
 auto repair services
 I-M testing
 convenience store
 other products?
b. Are gasoline prices posted clearly so motorists can determine what they will be paying before turning in?

3. Questions about performance

a. What is the price of regular unleaded gas?
b. What is the price of regular unleaded at the closest station on the same side of the street?
c. What is the price of regular unleaded at the closest station on the opposite side of the street?
d. How would you rate the quality of service provided -- cleanliness, quick service at the cash register, friendly staff, etc.?