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Paw m. Swiji

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What is kinked demand theory?

kinked demand curve is the situation where by the labours become satisfied with the employment benefits,and some of them leave the job.


Which market structures has a kinked demand curve in economics?

oligopoly


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.


How can the demand curve be derived using the marginal utility theory?

Marginal utility is the key concept underline demand .The height of a demand curve reflects marginal utility.The marginal utility curve resembles the demand curve. So, it is through the marginal utility we get the demand curve.


Is a demand curve created from a demand schedule?

The data on a demand schedule can be plotted on a demand curve. Often, a demand schedule will be created before the creation of a demand curve, so as to allow for greater accuracy when plotting the demand curve.

Related Questions

What is kinked demand theory?

kinked demand curve is the situation where by the labours become satisfied with the employment benefits,and some of them leave the job.


Which market structures has a kinked demand curve in economics?

oligopoly


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.


The theory of the kinked demand curve does not predict the price where the kink will occur?

Refer IGNOU Block 4, Page -44


How can the demand curve be derived using the marginal utility theory?

Marginal utility is the key concept underline demand .The height of a demand curve reflects marginal utility.The marginal utility curve resembles the demand curve. So, it is through the marginal utility we get the demand curve.


True or False the steeper the demand curve the less elastic the demand curve?

It is false that the steeper the demand curve the less elastic the demand curve. The steeper line is used in economics to indicate the inelastic demand curve.


Define price rigidity?

Price Rigidity is a condition where one follows a decrease in price but not an increase in price. This is due to the ability of other firms to match prices with it and it often leads to a kinked demand curve.


Is a demand curve created from a demand schedule?

The data on a demand schedule can be plotted on a demand curve. Often, a demand schedule will be created before the creation of a demand curve, so as to allow for greater accuracy when plotting the demand curve.


Is an increase in demand represented by a movement up the demand curve?

An increase in demand is represented by a shift of the demand curve to the right; not a movement along the demand curve. An increase in the quantity demanded would be a movement down the demand curve.


What the primary difference between aggregate demand curve and individual demand curve?

aggregate demand curve is the total sum of all the individual demand curves while individual demand curve is the demand made by the single individual.


What is the relationship between the demand curve and the concept of perfect substitutes in a graph of perfect substitutes?

In a graph of perfect substitutes, the demand curve is a straight line because consumers are willing to switch between the two goods at a constant rate. This means that as the price of one good decreases, consumers will demand more of that good and less of the other, resulting in a linear demand curve.


What is a demand curve and how it is different from demand function?

The demand curve demonstrates what happens when a product is demanded by customers. A demand function refers to an event that can affect the demand curve.