{"id":46677,"date":"2024-04-15T22:15:49","date_gmt":"2024-04-15T22:15:49","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=46677"},"modified":"2024-04-15T22:15:49","modified_gmt":"2024-04-15T22:15:49","slug":"kinked-demand-curve-is-related-with","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/kinked-demand-curve-is-related-with\/","title":{"rendered":"&#8216;Kinked&#8217; demand curve is related with"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a978f0be3300\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    Monopoly                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    Discriminating monopoly                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"true\">\r\n                    Oligopoly                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    Perfect competition                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: C. Oligopoly.<\/p>\n<p>A kinked demand curve is a theoretical concept that explains the pricing behavior of firms in an oligopoly market. The curve is kinked at the current price, and firms are reluctant to raise prices above the kink because they fear losing market share to competitors. However, they are also reluctant to lower prices below the kink because they fear that competitors will not follow suit, and they will lose profits.<\/p>\n<p>A monopoly is a market structure in which there is only one seller of a good or service. A discriminating monopoly is a type of monopoly in which the monopolist charges different prices to different consumers. Perfect competition is a market structure in which there are many sellers of a good or service, and the goods or services are identical.<\/p>\n<p>In an oligopoly, there are a few large firms that dominate the market. These firms are interdependent, meaning that the actions of one firm can have a significant impact on the other firms in the market. This interdependence can lead to a kinked demand curve.<\/p>\n<p>Suppose that a firm in an oligopoly is currently charging a price of $10. If the firm raises its price to $11, it is likely that some of its customers will switch to the products of its competitors. This is because the products of the firm&#8217;s competitors are very similar to its own, and the price difference of $1 is significant. As a result, the firm&#8217;s demand curve will <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n       <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div>  <\/a>\r\n    <\/div> be relatively elastic at the current price.<\/p>\n<p>However, if the firm lowers its price to $9, it is unlikely that it will attract many new customers. This is because the products of the firm&#8217;s competitors are also very similar to its own, and the price difference of $1 is not significant. As a result, the firm&#8217;s demand curve will be relatively inelastic at the current price.<\/p>\n<p>The kink in the demand curve occurs at the current price. The firm is reluctant to raise prices above the kink because it fears losing market share to competitors. However, it is also reluctant to lower prices below the kink because it fears that competitors will not follow suit, and it will lose profits.<\/p>\n<p>The kinked demand curve model is a useful tool for understanding the pricing behavior of firms in an oligopoly market. However, it is important to note that the model is a simplification of reality. In reality, the demand curves of firms in an oligopoly are likely to be more complex than the kinked demand curve model suggests.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>&#039;Kinked&#039; demand curve is related with<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/kinked-demand-curve-is-related-with\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"&#039;Kinked&#039; 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