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Kinked demand curve

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Reference no: EM131950064

This question refers to the "Kinked Demand Curve" model of an oligopoly.

Suppose an oligopolist is currently operating at an equilibrium price and quantity, P* and Q*, respectively. The oligopolist faces two possible demand curves if he changes price, as follows:

Inelastic Demand:       PI = 10 - 2QI

Elastic Demand:         PE = 8 - QE

a. What are the values for P* and Q*?

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Reference no: EM131950064

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