in the kinked demand model of oligopoly, if one firm increases its price, what i
ID: 1238803 • Letter: I
Question
in the kinked demand model of oligopoly, if one firm increases its price, what is the most likelt repsonse of other firms?-decrease prices
-increase prices
-not change their prices
-reduce their quantity
In the short run, output is
-absolutely fixed
-can vary due as the result of using a fixed amount of plant and equipment more or less intensively
-may be altered by varying the size of plant and equipment which now exist in the industry
-can vary as a result of changing the size of existing plants and by new firms entering or leaving the industry
Explanation / Answer
if one firm increases its price, what is the most likelt repsonse of other firms? decrease prices ,this is because the market are controlled by small sellers and to get control of the market they will decrease price In the short run, output is can vary as a result of changing the size of existing plants and by new firms entering or leaving the industry this is because the firms entering and leaving will have effect on markeet
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