Answer to Question #67655 in Microeconomics for Justin Naidoo
1.1Explain the implications and short comings of the kinked demand curve in an oligopolistic market.
1.2Using relevant examples differentiate between monopoly and monopolistic competition.
1.1 The kinked demand curve model assumes that a business might face a dual demand curve for its product based on the likely reactions of other firms to a change in its price or another variable.
1.2 There is a monopoly, when we have only one producer, but there is a monopolistic competition, when there is a lot of producers in the market, which produce differentiated products.
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