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Unit-16: Duopoly and Oligopoly: Cournot Model and Kinked Demand Curve
16.4 Summary Notes
· All the analysation of kinked demand curve expresses that when all sellers decrease their price
then there is price stability in oligopolistic market. Generally, changes in demand and cost brings
price stability until MC curve intersects MR curve in its below part. But price hike is found in high
demand and high cost.
16.5 Keywords
· Shortcomings: Demerits
· Stability: Rigidity (in price)
16.6 Review Questions
1. What do you mean by duopoly? Explain it.
2. What do you understand by Cournot model?
3. Write some points on ‘Price Determination in Oligopoly’.
Answers: Self Assessment
1. Seller 2. Zero 3. Demand Curve 4. (b)
5. (a) 6. (a) 7. (a) 8. True
9. False 10. True 11. True 12. True
16.7 Further Readings
1. Microeconomics—Frank Cowbell, Oxford University Press, 2007.
2. Microeconomics—Shipra Mukhopadhyay, Annie Books, 2011.
3. Microeconomics: An Advance Treatise—S.P.S. Chauhan, PHI Learning.
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