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CAPE Economics Unit 1 · 2005 · Paper 1 · Question 8(a)

Explain how oligopolistic firms expect rival firms to react to price increases versus price decreases according to the kinked demand curve model.

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Other parts of this question

  1. 8(b)Deduce what these competitor responses imply about the price elasticity of demand above and below the current price.[2 marks]

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