Asked by

Tyler Littlefield
on Oct 12, 2024

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Prices are rigid at the kink of an oligopolist's demand curve because

A) changes in fixed costs have no impact on the profit-maximizing price.
B) changes in marginal cost in the discontinuous section of the marginal revenue curve do not alter the profit-maximizing price and output.
C) changes in supply are infrequent.
D) changes in average cost in the gapped section of the marginal revenue curve alter the profit-maximizing price and output.

Profit-Maximizing Price

The price at which a business can sell its product or service to achieve the highest possible profit.

Marginal Cost

The cost added by producing one additional unit of a product or service.

Kink

A sudden change in the rate or direction of a curve or line, often used in economics to describe a sharp change in a demand or supply curve.

  • Gain insight into the circumstances that result in persistent pricing in oligopolistic environments.
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Cynder Galle GonzalesOct 19, 2024
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