WebMar 6, 2024 · A kinked demand curve is composed effectively of two demand curves which meet at the prevailing market price. At a price higher than the prevailing market price, a … WebJul 2, 2024 · The kinked demand curve model assumes that a business might face a dual demand curve for its product based on the likely reactions of other firms to a change in its …
Kinked demand - Wikipedia
WebA Kinked Demand Curve Consider a member firm in an oligopoly cartel that is supposed to produce a quantity of 10,000 and sell at a price of $500. The other members of the cartel can encourage this firm to honor its commitments by acting … WebQuestion: Question 37 Suppose that a member firm in an to raise its price? oligopoly cartel faces a kinked demand curve. What will happen if the firm decides Select the correct answer below: The other oligopolists will immediately raise their prices even higher. The other oligopolists will immediately raise their prices to match. crystal paddleboards
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WebThe kinked-demand curve explains price rigidity in oligopoly because firms expect any change in price will lower revenue and profits. Refer to the profit payoff matrix, and then … WebThe kinked-demand curve explains why firms in an oligopoly resist changes to price. If one of them raises the price, then it will lose market share to the others. If it lowers its price, then the other firms will match the lower price, … WebFigure 1. A Kinked Demand Curve. Consider a member firm in an oligopoly cartel that is supposed to produce a quantity of 10,000 and sell at a price of $500. The other members of the cartel can encourage this firm to honor its commitments by acting so that the firm faces a kinked demand curve. dyadic series