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Which market structures has a kinked demand curve in economics?
oligopoly
Who contributed the concept of Kinked Demand Curve?
Paw m. Swiji
When is there a gap in the kinked demand curve theory?
The kinked demand curve theory exhibits a gap in price elasticity at the kink point, where firms face different elasticities of demand above and below this price. This gap arises because firms believe that if they increase prices, competitors will not follow, leading to a loss of market share, while if they decrease prices, rivals will match the decrease, resulting in minimal gain in market share. Consequently, this creates price rigidity, as firms are reluctant to change prices due to uncertain responses from competitors.
What is the conventional model devised for studying the oligopoly market structure on the kinked demand curve explain the essential elements of this model?
The kinked demand curve model explains oligopoly pricing behavior by illustrating how firms react to competitors' price changes. In this model, the demand curve is kinked at the current market price: if a firm raises its price, it loses customers to competitors (indicating elastic demand); if it lowers its price, competitors will also lower theirs, leading to minimal gain in market share (indicating inelastic demand). This creates a price rigidity where firms are reluctant to change prices, resulting in stable prices despite changes in costs. The essential elements include the kinked demand curve, the asymmetric response of firms to price changes, and the resulting price stability in the market.
Which theory says that inflation occurs when the demand for goods exceeds the existing supply?
demand pull theory
The theory of the kinked demand curve does not predict the price where the kink will occur?
Refer IGNOU Block 4, Page -44
Which market structures has a kinked demand curve in economics?
oligopoly
Who contributed the concept of Kinked Demand Curve?
Paw m. Swiji
When is there a gap in the kinked demand curve theory?
The kinked demand curve theory exhibits a gap in price elasticity at the kink point, where firms face different elasticities of demand above and below this price. This gap arises because firms believe that if they increase prices, competitors will not follow, leading to a loss of market share, while if they decrease prices, rivals will match the decrease, resulting in minimal gain in market share. Consequently, this creates price rigidity, as firms are reluctant to change prices due to uncertain responses from competitors.
What is the conventional model devised for studying the oligopoly market structure on the kinked demand curve explain the essential elements of this model?
The kinked demand curve model explains oligopoly pricing behavior by illustrating how firms react to competitors' price changes. In this model, the demand curve is kinked at the current market price: if a firm raises its price, it loses customers to competitors (indicating elastic demand); if it lowers its price, competitors will also lower theirs, leading to minimal gain in market share (indicating inelastic demand). This creates a price rigidity where firms are reluctant to change prices, resulting in stable prices despite changes in costs. The essential elements include the kinked demand curve, the asymmetric response of firms to price changes, and the resulting price stability in the market.
What is the supply and demand theory?
what is the theory of suply and demand?
Which theory says that inflation occurs when the demand for goods exceeds the existing supply?
demand pull theory
Who had propounded the 'wealth theory of demand for money'?
Milton Friedman propounded the Wealth Theory of Demand for Money. It is also known as Restatement of Quantity Theory of money.
What theory says that inflation occurs when the demand for goods exceeds the existing supply?
demand-pull theory (by Solomon Zelman)
Theory of demand supply?
The theory of supply and demand is that when supply are plentiful, they are typically more affordable and easier to find. When supply is low, demand and prices increase as a result.
What is the pragmatic approach to demand analysis?
recent development in the theory to demand analysis
What are the full employment policies?
markan theory, inflation and extractive demand theory,
