According to the kinked demand curve theory of oligopoly each firm thinks its demand curve at prices above the existing price is a. less elastic than at prices below the exisiting price since price increases will be matched. b. more elastic than at prices below the exisiting price since price increases will be matched. c. less elastic than at prices below the exisiting price since price increases will not be matched. d. more elastic than at prices below the exisiting price since price increases will not be matched.

According to the kinked demand curve theory of oligopoly each firm thinks its demand curve at prices above the existing price is a. less elastic than at prices below the exisiting price since price increases will be matched. b. more elastic than at prices below the exisiting price since price increases will be matched. c. less elastic than at prices below the exisiting price since price increases will not be matched. d. more elastic than at prices below the exisiting price since price increases will not be matched.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter10: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 9SQP

See similar textbooks

Similar questions

In this assignment, we’re assuming you’re a manager of different types of buffalo wing restaurants. I’ll give different scenarios- some will require math and others will require writing. Cournot Oligopoly 2. Now, assume your buffalo wing firm is in a Cournot oligopoly with 3 additional firms. The market elasticity of demand for buffalo wings is -0.70. Find your firm’s elasticity of demand. Now find the profit-maximizing price for your firm if your marginal cost is $3.70.
Q)1Explain the following concepts :(a) Explain the Kinked Demand Curve and the reason for the rigidity in prices under oligopoly.(b) Explain how Price leadership and collusion are used to influence prices in oligopoly.(c) Difference between income elasticity and cross elasticity of Demand .
1.) Suppose you have a 10 identical firm Cournot Oligopoly. You don't have a demand equation but you do know that the market elasticity of demand is equal to -0.5 and MC = $4. What is market price? $4.00. none of the available options. $10.00 $5.00. 2.) Refer to the previous question. Suppose 2 firms leave the market. What is the new price? $5.33. $8.00. $4.00. none of the available options.
Suppose a country's mobile phone industry is supplied by only two firms (i.e. an oligopoly). Explain how the presence of two firms affects the price elasticity of demand of each firm's output.
Explain and describe the kinked demand curve of a firm in an oligopoly.
Faceblock, Gargle+, and SnapHat are rival firms in an oligopoly industry. If kinked-demand theory applies to these three firms, Faceblock’s demand curve will be: a. More elastic above the current price than below it. b. Less elastic above the current price than below it. c. Of equal elasticity both above and below the current price. d. None of the above
Explain with the aid of a diagram how an Oligopoly firm that is recognised as a leader in its industry will set it optimal price and output if it knows the market demand curve and it knows the supply curve of all the other.
Let's say that you know the following information for an oligopoly firm:Total Revenue equals $200 million.Variable Costs are $170 million.Fixed Costs equal $20 million.The firm is currently producing 2,000 products at the MC = MR point (and the MC curve is rising).What recommendation do you have for this firm?
How are the implications of the kinked demand curve in an oligopoly market best illustrsted and explained
Compare the quantity and price of an oligopoly tothose of a perfectly competitive market.
Explain the kinked demand curve theory of an oligopoly. Include inyour answer a discussion of a contemprary oligopoly.
Now, assume your buffalo wing firm is in a Cournot oligopoly with 3 additional firms. The market elasticity of demand for buffalo wings is -0.70. Find your firm’s elasticity of demand. Now find the profit-maximizing price for your firm if your marginal cost is $3.70.