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Unformatted text preview: revenue curve segments DE and ED 1 respectively. The two marginal revenue curves are broken and the broken portion is along the vertical line EQ. Marginal cost curve of the firm passes from the broken portion of the marginal revenue curve. The equality between MR=MC is also fulfilled for the same output level Q and price P. The Kinked demand curve appears to be satisfactory in every respect. However, the Kinked demand curve solution has also come under some criticism. Sweezy's behavioral assumptions are doubted. Once the Kink position is known the rest of the analysis follows; however, how to determine the Kink is not stated....
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This note was uploaded on 11/26/2011 for the course ECON MICRO ec 201 taught by Professor - during the Fall '10 term at Montgomery.
- Fall '10