Law, Economics & Statistics
1. LCD Monitor Anti-trust case
The Department oqustice (Do)) is investigating HP for conspiring with LCD monitor manufacturers to
artificially raise the price of monitors that they sell with desktop computers. They have strong evidence
that the conspiracy started in August 2005, and ended in January 2007. They are trying to find the total
amount that HP was able to overcharge during this time period. The DO] has data on the total sales (in
thousands of dollars) of monitors for each month between January 2005 and December 2007 for both HP,
and Acer, which was not a part ofthe conspiracy.
A. Create a measure of how much the HP overcharged (in total) per month during the conspiracy.
Explain any assumptions you are making. You may want to take into account the following:
a. Sales of monitors are traditionally higher in August & September for the start of school, and
in December because of Christmas.
b. All computer companies have seen their sale of desktop computers drop over time as more
and more consumers choose laptop computers (which do not have LCD monitors).
B. Provide an estimate of the total amount HP overcharged consumers during the entire 18 month
conspiracy.
C. Provide a 95% confidence interval as bounds for your total found in part B.
Remember to EXPLAIN what you are doing, and why. Email your final answer to me at:
kbarnes@email.arizona.edu by 5pm MST (Tucson Time) Friday. Ifyou are unable to email me your
answer, you can drop it off at Law Rm 210 (faculty assistants) until 5pm. Note that the second floor of the
law school locks automatically at 5pm sharp, so you can’t be late!
Include in your answer all calculations you made, either by attaching the excel spreadsheet (or log file for
Stata) to the email, or printing it out.