If an oligopoly is faced with a kinked demand curve which is relatively elastic above and relatively inelastic below the going price, then it will:
(a) increase total revenue by increasing price, but decrease total revenue by decreasing price.
(b) increase total revenue by decreasing price, but decrease total revenue by increasing price.
(c) increase total revenue by either increasing or decreasing price.
(d) decrease total revenue by either increasing or decreasing price.

Question

16-12-2022
Business

contestada

If an oligopoly is faced with a kinked demand curve which is relatively elastic above and relatively inelastic below the going price, then it will:
(a) increase total revenue by increasing price, but decrease total revenue by decreasing price.
(b) increase total revenue by decreasing price, but decrease total revenue by increasing price.
(c) increase total revenue by either increasing or decreasing price.
(d) decrease total revenue by either increasing or decreasing price.

Respuesta :

Otras preguntas

Factor the polynomial , please show how you got answers

Due to a recent hurricane, a city is having trouble getting enough food into its grocery stores. The people living in this area are dealing with a problem relat

at higher speeds, a vehicle rate of acceleration will be what?

Why the chromosomes are in so many different positions, rather than in one distinctive position?

Which phrase appears in the preamble of Florida’s constitution and in the preamble of the US Constitution? a. maintain public order b. insure domestic tranqui

The core of a realistic novel is: a. setting b. conflict c. characterization

In the history of events in Russia in the 19th and 20th centuries, the slogan "one language, one church, and one ruler" refers to a czarist program to bring abo

if salt was removed from water near the poles, the water near the poles would?

In which of the following ways did Alexander Hamilton die? Select one: a. He died of old age. b. He died in a gun duel. c. He died after being trampled by ho

Which of the following territories is INCORRECTLY matched with the nation that conquered or assumed control over it by the eve of World War II? a. Ethopia/Ital

ACCESS MORE

Tutorconsortium707 Tutorconsortium707 · Answer 1 · 2022-12-24T09:27:41+01:00

(d) decrease total revenue by either increasing or decreasing price.

kinked-demand curve model of oligopoly:

This model was developed independently by Prof. Paul M. Sweezy on the one hand and Profs. R. C. Hall and C. J. Hitch on the other hand.

The assumptions of kinked-demand curve model of oligopoly are:

(i) In an oligopolistic market, there aren't many companies.

(ii) The businesses are making nearly identical products.

(iii) The companies don't invest in advertising, and the quality of the goods stays the same.

(iv) The product has previously been assigned a set of pricing, and these prices are now in effect.

Because oligopolistic prices may shift seldom, the kinked-demand curve model of oligopoly can help to explain why.

Due to the fact that an oligopoly's kinked demand curve is highly elastic above and relatively inelastic below the going price.

This means that because demand is inelastic and price declines, the response to a price rise is less than the response to a price decrease. As a result, either an increase in price or a decrease in price will reduce overall income.

To know more about kinked-demand curve model of oligopoly:

https://brainly.com/question/1245770

#SPJ4