2.1 Explain the kinked demand curve theory of an oligopoly. Include in your answer a discussion...

2.1 Explain the kinked demand curve theory of an oligopoly. Include in your answer a discussion of a contemporary oligopoly. (13)

2.2 Discuss and motivate whether the following market structures can engage in price discrimination.

2.2.1 Perfect competition

2.2.2 Monopoly

Expert Solution

Rahul Sunny answered 2 years ago

Subject Economics: QUESTION TWO: 2.1 Explain the kinked demand curve theory of an oligopoly. Include in...

Subject Economics: QUESTION TWO: 2.1 Explain the kinked demand curve theory of an oligopoly. Include in your answer a discussion of a contemporary oligopoly.

In the kinked -demand curve theory of oligopoly ,price is relatively inflexible because a firm contemplating...

In the kinked -demand curve theory of oligopoly ,price is relatively inflexible because a firm contemplating a price change assumes that's its rivals will follow a price cut and ignore a price increase. a) In terms of the above , fully discuss the kinked demand curve theory of an oligoplogist. (Answer should be 2 typed pages long) Answer should be structured in the following: 1)introduction 2)definition of Oligopoly 3) assumptions of the model 4)conclusion

An oligopoly firm faces a kinked demand curve with the two segments given by: P =...

An oligopoly firm faces a kinked demand curve with the two segments given by: P = 230 – 0.5Q and P = 280 – 1.5Q. The firm currently has a constant marginal cost, MC of $150. State the assumptions of the kinked demand model in terms of price-matching and elasticity. Determine the quantity and price at the kink. Calculate how much higher the marginal cost must be before the firms would change the profit-maximizing output and therefore the price.

A Explain and show the kinked demand curve theory. What is its weakness? B. Show and...

A Explain and show the kinked demand curve theory. What is its weakness? B. Show and explain the dominant firm model. C. Why do firms in a Bertrand lower price to MC?

7) Draw the possible kinked demand curve facing an oligopoly firm? At what point does the...

7) Draw the possible kinked demand curve facing an oligopoly firm? At what point does the firm produce? What happens to price and output if marginal costs change? Explain why there is a kink in the demand curve. What do the other firms do when an oligopoly firm raises its price and when it lowers its price?

Explain the rationale for a kinked demand curve for an oligopolist. Explain the benefits and/or consequences...

Explain the rationale for a kinked demand curve for an oligopolist. Explain the benefits and/or consequences to society of this situation.

Question 6. a. Why are firms in oligopoly interdependent? b. Draw and explain the kinked demand...

Question 6. a. Why are firms in oligopoly interdependent? b. Draw and explain the kinked demand curve for oligopoly. Explain the assumption and the reasons for an oligopoly firm to have a kinked demand curve. c. Comment on the following statement: ”If one player in the game does not have a dominant strategy, it is impossible to predict the outcome of the game.”

The kinked demand curve theory suggests four possible outcomes. How are they similar to the four...

The kinked demand curve theory suggests four possible outcomes. How are they similar to the four outcomes in a game theory matrix with two firms and two prices?

1. explain the Kinked Demand model of Oligopoly. 2. why monopolistic firms spend money on product...

1. explain the Kinked Demand model of Oligopoly. 2. why monopolistic firms spend money on product differentiation and advertising when it only adds to costs?

QUESTION TWO [30] 2.1 Discuss the concept of price elasticity of demand. Include in your answer...

QUESTION TWO [30] 2.1 Discuss the concept of price elasticity of demand. Include in your answer an explanation of the relationship of its key variables to the demand curve and the law of demand. (15) 2.2 Using relevant diagrams, explain how income elasticity of demand can help a business to evaluate the service it provides according to changes in demand and consumer income. (15)

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