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ANDEAN COMMUNITY: The Andean Community (CAN) is a subregional organization endowed with an international legal status, which is made up of Bolivia, Colombia, Ecuador, Peru and Venezuela. The main objectives of the Andean Community are to promote the balanced and harmonious development of the member countries under equitable conditions, to boost their growth through integration and economic and social cooperation and to enhance participation in the regional integration process with a view to the progressive formation of a Latin American common market. The Andean Community started operating on August 1, 1997 with a General Secretariat, whose headquarters are in Lima (Peru), as its executive body.
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Lesson 20: Oligopoly | Unit 4: Analysis
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Page: 15 of 24
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Topic:
Kinked-Demand Curve
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- How and why oligopoly firms have rigid prices can be illustrated with the use of the kinked-demand curve.
- A kinked-demand curve is a demand curve with two distinct segments with different elasticities that join to form a kink.
- The two segments of a kinked-demand curve are:
- A relatively more elastic segment for price increases.
- A relatively less elastic segment for price decreases.
- The most striking feature of this curve is that it comes it three parts:
- One part corresponds with the relatively more elastic demand curve for price increases.
- The second part corresponds with the relatively less elastic demand curve for price decreases.
- The third part is the vertical line connecting these two segments.
- This disjointed marginal revenue curve is the key to oligopoly price rigidity.
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DEMAND DETERMINANTS Five ceteris paribus factors that affect demand, but which are assumed constant when a demand curve is constructed. They are buyers' income, buyers' preferences, other prices, buyers' expectations, and number of buyers. Changes in the demand determinants cause shifts of the demand curve and disruptions of the market.
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RED AGGRESSERINE
[What's This?]
Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius wanting to buy either a key chain with a built-in flashlight and panic button or a green and yellow striped sweater vest. Be on the lookout for malfunctioning pocket calculators.
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This isn't me! What am I?
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Francis Bacon (1561-1626), a champion of the scientific method, died when he caught a severe cold while attempting to preserve a chicken by filling it with snow.
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"A stumble may prevent a fall. " -- Margaret Thatcher, British prime minister
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MSE
Mean Square Error
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