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?

Expert Solution

Rahul Sunny answered 2 years ago

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.

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

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.”

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

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.

Draw and oligolopy #1 graph and explain why it has a kinked demand curve and sticky...

Draw and oligolopy #1 graph and explain why it has a kinked demand curve and sticky prices and quantity. Explain the two other oligolopy models. Explain the pricing strategy options of a duopoly and how this "Payoff Matrix" resembles the "Prisoners dilemma."

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?

The blue curve on the followinggraph represents the demand curve facing a firm that can...

The blue curve on the following graph represents the demand curve facing a firm that can set its own prices.Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.On the graph input tool, change the number found in the Quantity Demanded field to...

The demand curve facing a perfectly competitive firm is: a) the same as the market demand...

The demand curve facing a perfectly competitive firm is: a) the same as the market demand curve b) downward-sloping and less flat than the market demand curve c) downward-sloping and more flat than the market demand curve d) perfectly horizontal e) perfectly vertical The supply curve for a competitive firm is: a) its entire MC curve b) the upward-sloping portion of its MC curve c) its MC curve above the minimum point of the AVC curve d) its MC curve...

73. In perfect competition, the marginal revenue curve and the demand curve facing the firm are...

73. In perfect competition, the marginal revenue curve and the demand curve facing the firm are identical. intersects the demand curve when marginal revenue is minimized. is always above the demand curve facing the firm. is always below the demand curve facing the firm. 75. Marginal revenue is the additional profit the firm earns when it sells an additional unit of output. the added revenue that a firm takes in from selling an additional unit of output. the difference between...

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