WebAnd above 50p demand is, And above 50p demand is elastic because of substitutes: if Coke charges more than 50p, it’ll lose lots of customers because they’ll switch over to cheaper Pepsi. So Coke’s demand or AR curve looks like this, kinked: Above 50p, demand or AR1 is elastic (flatter). Below 50p, demand or AR2 is inelastic (steeper).

The kinked Demand Curve: Meaning, Examples & Characteristics

WebThe kinked- demand curve is a demand curve comprised of two segments, one that is relatively more elastic, which results if a firm increases its price, and the other that is relatively less elastic, which results if a firm decreases its price. These two segments are joined at a corner or "kink." This demand curve is used to provide insight into ... WebA kinked demand curve is made of two segments of a firm’s demand curve, which are separated at the price that has been established in the industry. The demand segment corresponding to lower prices is less elastic than the demand segment corresponding to … in a triangle

Solved For a Kinked demand curve, the part above the …

WebIn the 'kinked-demand curve' model, the upper portion of the demand curve is: A. elastic. B. inelastic. C. perfectly elastic. D. unitary elastic. Medium. Open in App. Solution. Verified by … Webthe existence of the kinky demand curve is questionable."7 Stigler here seems to imply that "belief" in the kinked demand curve, and even its "existence" (as a basis of entrepreneurial decision) depend on continuing or repeated corroboration by (unhappy) experi-ences of the conjectures which it describes. Such ex-post verification WebThe kinked demand curve model for oligopoly markets is based on the assumption that companies within the market are interdependent. This means that the behavior of one company is expected to impact the behavior of the other companies in the market. In the case of the kinked demand curve model this interdepence works as follows. in a triangle abc i is the incentre