PPT-Kinked Demand Curve Model

Prepared by Anindita Chakravarty INTRODUCTION The kinked demand curve of oligopoly was developed by Paul M Sweezy in 1939 The model advocates that the behavior of oligopolistic organizations remain stable . 11.203 Kinked Demand Curve Theory Game Theory Ad apted from Parkin (2003) 6 th ed. October 28, 2010 Revised 10/28/2010 at 1pm 1 Kinked Demand Curve Theory Remember: In oligopoly, the quanti Extension Class Presentation. Ruth Tarrant. Consumption functions. 45⁰ line. C = a + . bY. Consumption (C). Income (Y). Yo. a = y-intercept = autonomous consumption (i.e. the level of consumption when income is zero). A table showing how much of a good or service consumers will want to buy at different prices. See pg. 50; Figure 5.1. Demand Schedule. Demand Curve – A graphical representation of the demand schedule. A2 Economics. Barriers to Entry. Write down as many barriers to entry in an oligopolistic market as you can.. With short description.. Aims and Objectives. Aim: . To understand firm behaviour in an oligopoly.. The Kinked Demand Curve. A2 Economics. Aim. To fully understand kinked demand curve theory.. Objectives. Define . perfect oligopoly and an imperfect . oligopoly. .. Explain the features of a competitive oligopoly.. Oligopoly. : . a situation in which a particular market is controlled by a small group of firms. . Product . may be . homogeneous. . (. eg. steel, cement) = pure/homogeneous oligopoly. . . Mostly . Today:. Aggregate demand. Why is it downward sloping?. Factors that affect the aggregate demand. Aggregate supply. Long-run aggregate supply. Short-run aggregate supply. Why is it upward sloping?. Factors that affect the short-run aggregate supply. Demand. Price and Quantity. Quantity Demanded. Law of Demand. Determinants of Demand. Demand. Demand is on overall indication of a consumers (buyers/purchasers) . desire. and . ability. to purchase a given good or service. Chapter 4 Section 1. What is Demand??. http://learn360.infobase.com/p_ViewVideo.aspx?xtid=71683&tScript=. 0. . Economic System. In a market system, the interaction of buyers and sellers determine the prices of most goods as well as what quantity of a good will be produced.. Reasons for Changes in Demand. Assume that Demand Curve B represents the baseline (original) annual consumption of U.S.-made cars.. For each of the following scenarios, decide: . Will this event cause a shift in the demand curve?. What is the equation of the blue curve?. Lost in translation?. The blue curve on the right is a translation. of the red curve. What is the equation of. the blue curve?. Notes and Solution. The blue curve is a translation of the red. Agenda. Bell Ringer: CBM #3 (Chapters 5 and 6). Preview – How much are you willing to pay?. The Law of Demand . and . Demand Shifters. Activity . – Demand . headlines. Exit Ticket – Find your own!. Explain. the law of demand and how a demand schedule is represented in a demand curve. . Understand. the difference between and individual and a market demand curve.. Law of Demand. Key Terms. Demand. 1-What is a “change in the quantity demanded”. ?. The movement along the demand curve showing that the amount someone is willing to purchase changes when the price changes. .. 2-Explain the “. Income Effect.