CA Foundation Exam > CA Foundation Questions > Kinked demand curve is related to which marke...
Start Learning for Free
Kinked demand curve is related to which market structure
- a)Oligopoly
- b)Monopoly
- c)Monopsony
- d)Monopolistic competition.
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Kinked demand curve is related to which market structurea)Oligopolyb)M...
Kinked Demand Curve in Oligopoly Market Structure
The kinked demand curve is related to the market structure of oligopoly. In an oligopoly market, there are only a few large firms that dominate the industry. These firms have a significant market share and their actions can greatly impact the market.
Explanation
Kinked Demand Curve:
In an oligopoly market, firms face a kinked demand curve. The kinked demand curve theory suggests that rivals will match a price decrease but not a price increase. This results in a gap or kink in the demand curve at the current price level.
Reasons for Kinked Demand Curve:
- If one firm lowers its price, other firms will follow suit to prevent losing market share.
- If one firm raises its price, other firms may not follow suit to avoid losing customers.
Implications:
- Price rigidity: Prices tend to remain stable in an oligopoly market due to the kinked demand curve.
- Non-price competition: Firms may compete through advertising, product differentiation, or other non-price competition strategies.
- Uncertainty: The kinked demand curve model leads to uncertainty for firms as they cannot predict how rivals will react to their price changes.
Conclusion
In conclusion, the kinked demand curve is a key feature of the oligopoly market structure. It reflects the interdependence of firms in oligopoly markets and the complex dynamics that arise due to competition among a small number of dominant firms.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Top Courses for CA FoundationView all
Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer?
Question Description
Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer?.
Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer?.
Solutions for Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Kinked demand curve is related to which market structurea)Oligopolyb)Monopolyc)Monopsonyd)Monopolistic competition.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup