Homework Answers
The oligopoly firms are interdependent are each other so the actions of one firm would affect the other firms too. The oligopoly firms follows a price decrease and not a price increase, this is because the when the firm rises the consumers will switch to other products and the market share will decrease. So other firms would not follow a price increase.
When the price decesases the market share for particular firm will increase so other firms will also follow the price cut.
Ans: FALSE.
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Question 18 1.5 pts An oligopolist operating with a kinked demand curve would expect rivals to...
The kinked-demand curve for oligopolists assumes that rivals will
a. The kinked-demand curve for oligopolists assumes that rivals will match price cuts and price increases. match price increases, but ignore price cuts. match price cuts, but ignore price increases. neither match price cuts nor price increases. b. There is a gap in the oligopolist's marginal-revenue curve because price drops abruptly. the cost of production changes abruptly. the slope of the demand curve changes abruptly. price rises abruptly. c. The kinked-demand curve explains price rigidity in oligopoly because firms expect any change in price will lower revenue and profits. firms agree to...
Question7 0.1 pts A kinked demand curve O is used to show why oligopolists frequently change...
Question7 0.1 pts A kinked demand curve O is used to show why oligopolists frequently change prices. explains how certain prices arise in an oligopoly market O shows that firms in oligopolistic markets are not interdependent. O illustrates why oligopolists may be reluctant to change their pricing strategy. O is used to show why oligopolists must collude to set prices. Question 8 0.1 pts Which of the following is true regarding a kinked demand curve? O Firms worry about their...
The kinked demand curve explains the observation that in oligopoly markets Multiple Choice Rivals match price...
The kinked demand curve explains the observation that in oligopoly markets Multiple Choice Rivals match price increases. 0 Prices may not change even in the face of cost increases. 0 Practice product differentiation 0 C) Rivals do not match price reductions 0 O Some companies co not play by the rules
4. A kinked demand curve can explain rigidity of oligopolists' administered price. What does inflexible, administered...
4. A kinked demand curve can explain rigidity of oligopolists' administered price. What does inflexible, administered pricing mean? a. b. Why would an oligopolist have little motivation to change its price frequently? In the diagram below, assume that the equilibrium price is at point G. Is this over costs? Is the oligopolist earning economic profit? Explain C. d. At G there is a kink in the effective demand and marginal revenue curves of the oligopolist. Why? i. If it cuts...
Question 13 1.5 pts Oligopolies with kinked demand curves change their prices quickly and frequently. True...
Question 13 1.5 pts Oligopolies with kinked demand curves change their prices quickly and frequently. True False
Question 11 1.5 pts An increase in marginal cost that remains within the gap of the...
Question 11 1.5 pts An increase in marginal cost that remains within the gap of the marginal revenue curve of a kinked demand oligopolist will: keep price and output the same. O raise price and decrease output. lower price and increase output. raise price and raise output. lower price and lower output.
in Kinked Demand curve theory" , if a company increases its price, how do its competitors...
in Kinked Demand curve theory" , if a company increases its price, how do its competitors react to it? If a company cut its price, how do its competitors react to it? Can you explain the shape of Kinked Demand curve? Can you describe the shape of MR(marginal Revenue) curve under Kinked Demand curve? Would be greatly appreciated if it answered in 5sentences
1. The following graph depicts the demand curve, marginal revenue curve, and marginal cost curve that...
1. The following graph depicts the demand curve,
marginal revenue curve, and marginal cost curve that an oligopolist
faces. The firm is currently charging the cartel price, P*, and
producing the cartel quantity, Q*.
Suppose input prices fall and marginal cost decreases
from MC1 to MC2. Based on this event alone, the firm depicted in
the figure above will
2. Suppose one rental car company raises its prices
and the rival car companies leave their prices unchanged. But when
another...
9. Understanding the kinked demand curve theory Aa A Happyland is one of five amusement parks...
9. Understanding the kinked demand curve theory Aa A Happyland is one of five amusement parks on Sunshine Island. The following graph shows Happyland's kinked demand curve (DID2) and the resulting marginal revenue curve (MRIMR2). The graph also shows two possible marginal cost curves (MC1 and MC2) PRICE AND COSTS (Dollars per ticket 48 D1 40 MRT 32 MCI 16 : MC2 MR2 0412 16 20 4 QUANTITY IMittions of tickets per yearl Assume Happyland's marginal cost is represented by...
Question 1 Other things remain unchanged, the market demand curve for a particular...
Question 1 Other things remain unchanged, the market demand curve for a particular expected to shift leftwards when the price of that product declines. . True False Question 2 Other things remain equal, which of the following factors causes the market supply curve of Blue-ray players to shift leftwards? The costs of producing a single Blue-ray player increases. The number of firms selling Blue-ray players increases. The sellers are expecting the price of Blue-ray players to decline in the soon future. Non of the above factors causes the...
a. The kinked-demand curve for oligopolists assumes that rivals will match price cuts and price increases. match price increases, but ignore price cuts. match price cuts, but ignore price increases. neither match price cuts nor price increases. b. There is a gap in the oligopolist's marginal-revenue curve because price drops abruptly. the cost of production changes abruptly. the slope of the demand curve changes abruptly. price rises abruptly. c. The kinked-demand curve explains price rigidity in oligopoly because firms expect any change in price will lower revenue and profits. firms agree to...
Question7 0.1 pts A kinked demand curve O is used to show why oligopolists frequently change prices. explains how certain prices arise in an oligopoly market O shows that firms in oligopolistic markets are not interdependent. O illustrates why oligopolists may be reluctant to change their pricing strategy. O is used to show why oligopolists must collude to set prices. Question 8 0.1 pts Which of the following is true regarding a kinked demand curve? O Firms worry about their...
The kinked demand curve explains the observation that in oligopoly markets Multiple Choice Rivals match price increases. 0 Prices may not change even in the face of cost increases. 0 Practice product differentiation 0 C) Rivals do not match price reductions 0 O Some companies co not play by the rules
4. A kinked demand curve can explain rigidity of oligopolists' administered price. What does inflexible, administered pricing mean? a. b. Why would an oligopolist have little motivation to change its price frequently? In the diagram below, assume that the equilibrium price is at point G. Is this over costs? Is the oligopolist earning economic profit? Explain C. d. At G there is a kink in the effective demand and marginal revenue curves of the oligopolist. Why? i. If it cuts...
Question 13 1.5 pts Oligopolies with kinked demand curves change their prices quickly and frequently. True False
Question 11 1.5 pts An increase in marginal cost that remains within the gap of the marginal revenue curve of a kinked demand oligopolist will: keep price and output the same. O raise price and decrease output. lower price and increase output. raise price and raise output. lower price and lower output.
1. The following graph depicts the demand curve,
marginal revenue curve, and marginal cost curve that an oligopolist
faces. The firm is currently charging the cartel price, P*, and
producing the cartel quantity, Q*.
Suppose input prices fall and marginal cost decreases
from MC1 to MC2. Based on this event alone, the firm depicted in
the figure above will
2. Suppose one rental car company raises its prices
and the rival car companies leave their prices unchanged. But when
another...
9. Understanding the kinked demand curve theory Aa A Happyland is one of five amusement parks on Sunshine Island. The following graph shows Happyland's kinked demand curve (DID2) and the resulting marginal revenue curve (MRIMR2). The graph also shows two possible marginal cost curves (MC1 and MC2) PRICE AND COSTS (Dollars per ticket 48 D1 40 MRT 32 MCI 16 : MC2 MR2 0412 16 20 4 QUANTITY IMittions of tickets per yearl Assume Happyland's marginal cost is represented by...
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