I’m working on a micro economics question and need an explanation to help me learn.
On a sheet of paper (or using a drawing software if you prefer), answer all part of the question below using diagrams and brief explanations where appropriate. When using a diagram be sure to appropriately label everything. When you are finished answering the question, be sure to write your name at the top of the paper, take a picture/screenshot of the paper, and upload the picture/screenshot here.
Consider our study of oligopoly firms in class.
- Draw the diagram for an oligopoly firm that faces a kinked demand curve. Be sure to include the firm’s marginal revenue curve as well. At what point will this oligopoly firm operate?
- In two sentences explain whether or not firms in the above kinked demand curve model will engage in price competition. If so, how come? If not, how will the firms compete with one another?