Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
(Kinky Demand Curve) Short Period
Kinked demand curve was first used by Prof. Paul M. Sweezy to elucidate price rigidity under oligopoly. In an oligopoly market, firm knows that if it increases price, other firms won't follow; though if price is reduced, other firms will follow price reduction. In some respect, price output analysis in oligopoly is simple. Because every seller wants to avoid uncertainty, each oligopolistic firm will adhere to the point of kink where itis safe and where it can anticipate the reaction of its rivals. Though the firm will neither decrease nor increase price.
Figure: Kinked Demand Curve
This is a significant consequence of the existence of the kink in demand curve of firm. Since of the vertical section in MR, which is uncertainty range, without affecting the price or level of output. Under these situations, equality between MR and MC won't determine the point of equilibrium. The profits will, though, be determined as in any other market, by difference between AC andAR. With a given marginal cost of production, OP is more about to be the profit-maximising price. Length of the discontinuity portion in MR relies on the relative elasticity of demand at point E of AR. The greater the elasticity of demand of portion of AR above point E and the lower the elasticity of demand of the portion of AR below point discontinuity portion of MR, the bigger will be discontinuity portion of MR. Figure above demonstrates that price is fixed at OP and output is OM.
PER CAPITA INCOME AND INTERNATIONAL COMPARISONS Per capita income figures can also be used to compare the standards of living of different countries. Thus if the per capita in
a) The production-possibilities curve is? b) If there is a shortage in the provider of a product, we can conclude that its price: c) An enhance in supply and a
the demand for widgets(x) is given by: px=160 -4x the production of widget has the following average variable cost: Avc=2x-20 fixed cost are 162 calculate the output level of widg
Goverment Banker, Fiscal Agent and Adviser Central banks in all countries acts as the fiscal agent, banker and adviser on all important financial matters to government of thei
What are the significant tools of the perfect competition and the supply curve? Perfect Competition and the Supply Curve: a. In Perfect competition the characteristics of a
what is demand estimation
Mrs John Robinson- 'Oligopoly is market situation in between monopoly and perfect competition in which the number of sellers is more than one but is not so large that the market pr
Using the same simple macro model we developed in Module 2: a. Show what will happen to national income (GDP) if the administration implements another $100 (billion) stimulus s
Equilibrium Income In this model, aggregate desired expenditure has three components: Consumption, Investment and Government Expenditure:
APPROACHES TO MEASURING NATIONAL INCOME The compilation of national income statistics is a very laborious task. The total wealth of a nation has to be added up and there are
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd