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.
Real and nominal wages Wages are wanted only for what they will buy, real wages being wages in terms of the goods and services that can be bought with them. Nominal wages
ECONOMIC EFFECTS OF TAXATION a. A deterrent to work Heavy direct taxation, especially when closely linked to current earnings, can act as a serious check to production
Explain the short-run production function with one variable input with the help of assumed figures. Clearly indicate the three stages of physical product, using table and graphs.
Another vital relationship that is often referred to in economic analysis is the relationship between consumption expenditure andprice elasticity. From the law of demand, we know t
In a one-shot game, if you advertise and your rival advertises, you will each earn RM5 million in profits. If neither of you advertises, your rival will make RM4 million and you w
PRINCIPLES OF AN OPTIMAL TAX SYSTEM When taxes are imposed certain conditions must be fulfilled. These conditions are known as Principles or canons of taxation. According to
According to J.B. Clark's profits arises in a dynamic economy, not in a static one. A static economy is one in which there is absolute freedom of competition population and capital
In 2006, a hospital with 130 beds had 8,795 admissions. The average length of stay?for every patient was 4.7 days. Assuming full capacity is 100 percent, detremine the occupancy ra
on the application of any of the concepts learnt in Managerial Economics. You may try to use these concepts to everyday problems in life or in any of the current debates on in the
Problems of prices and Incomes policy i. Confrontation The imposition of the prices and incomes policy, voluntary or statutory, risks the possibility of confrontation w
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