Question

In: Economics

according to the kinked demanded curve model, an oligopolistic firm will produce where: A: average total...

according to the kinked demanded curve model, an oligopolistic firm will produce where:

A: average total cost is minimized

B: price equals marginal cost

C: marginal revenue equals marginal cost

D: the demand curve intersects the average total cost curve

Solutions

Expert Solution

Option

C: marginal revenue equals marginal cost

the kink of the curve at the place where MR=MC of the firm is equal and the kinked demand depicts the sticky prices so the curve cuts at that output level.

Rahul Sunny answered 2 years ago
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