The kinked Oligopoly Demand curve refers to a demand curve with two different segments having two distinct rates of elasticity that join to form a kink. The kinked-demand curve helps to explain the rigidity in Oligopoly price. The kinked-Oligopoly demand curve consists of a more elastic segment showing price increases and a less elastic segment showing price decreases.Know More
The Oligopoly demand curve comprises of two segments with a relative rate of elasticity based on the independent decision-making of oligopolistic companies. The demand curve indicates that firms have a belief that if they make any change in prices of their products, all other competitors will also change their prices. For instance, if they increase their prices then their competitors will also increase and vice-versa.
Oligopolistic firms face downward sloping demand curves, but the elasticity depends on how the competitors react to price and output changes. If competitors refuse to follow a price increase by one company, the demand becomes relatively elastic. If such a firm raises its prices, its total revenue falls. However, if rivals match the price reduction of one business to avoid losing market share, the demand becomes more inelastic. In such a scenario, a fall in price leads to a decline in total revenue.Learn more about Writing
A shift of the demand curve to the right represents any event, excluding a change in price, that increases the quantity of a good or service demanded by buyers in the marketplace. The demand curve is an economic model of buyer behavior showing how a change in the price of a good or service results in an inverse change in the quantity of that good or service demanded by buyers in the marketplace.Full Answer >
The demand curve for a monopolist slopes downward because the market demand curve, which is downward sloping, applies to the monopolist's market activity. Demand for the monopolist's product increases as its price decreases. According to Boundless, an educational resource website, the downward sloping demand curve contributes to market inefficiency, which leads to excess production capacity and a loss of consumer surplus.Full Answer >
The downward slope of a demand curve is due to consumers being less willing to purchase expensive products. As the price increases, potential consumers are likely to buy competing products. They may also refrain from purchasing a similar product.Full Answer >
In economics, a demand curve is a model that shows the inverse relationship between the price of a good or service and the quantity of that good or service demanded by buyers in the marketplace. A movement along the demand curve for a good or service is caused by a change in the price of that good or service.Full Answer >