Asked by
Estrella Moran
on Nov 26, 2024
Verified
If an oligopolist is faced with a marginal revenue curve that has a gap in it, we may assume that
A) it is colluding with its rivals to maximize joint profits.
B) its demand curve is kinked.
C) it is selling a standardized product.
D) it is selling a differentiated product.
Marginal Revenue Curve
A graphical representation showing how marginal revenue varies with changes in quantity sold.
Kinked
Often relating to the kinked-demand curve seen in oligopolistic markets, where firms face a price elasticity that abruptly changes as prices increase or decrease.
Oligopolist
A seller in an oligopoly market, a market structure characterized by a small number of firms dominating the market.
- Familiarize yourself with the kinked-demand curve model and its effects on the determination of prices and outputs.
Verified Answer
GE
Learning Objectives
- Familiarize yourself with the kinked-demand curve model and its effects on the determination of prices and outputs.