An oligopolist has a marginal revenue curve that jumps down at 500 units of output.What kind of oligopoly does the firm most likely belong to?
A) Sweezy
B) Cournot
C) Stackelberg
D) Bertrand

Question

Quizplus · Accepted Answer

The marginal revenue curve of an oligopolist in a Sweezy (kinked demand) oligopoly jumps down at the point where the firm's competitors are assumed to match any price increase, but not any price decrease. This creates a discontinuity in the MR curve at the point of the kink.

An Oligopolist Has a Marginal Revenue Curve That Jumps Down