I understand how to compute the revenue but I'm stuck on computing the elasticity. The following graph refers to a situation wherein an oligopolistic firm faces a kinked demandcurve.Price ($)$600$500$400$300$200$100(5000, $550) =(10000, $500) =(11000, $300) =00(5,000, $550)5,000(10,000, $500)(11,000, $300)10,000 15,000 20,000Quantity1) In one/two sentences, describe why an oligopolistic firm might face this situation (what is thename of the pricing strategy that leads to this situation?)2) Compute the elasticities and revenues at all THREE points shown on the graph: (5000, 550),(10000, 500) and (11000,300).ElasticityRevenues(5000, $550) = $2,750,000(10000, $500) = $5,000,000(11000, $300) = $3,300,000

The firms in an oligopoly may collude to set prices or output levels, leading to reduced competition…

The following graph refers to a situation wherein an oligopolistic firm faces a kinked demand curve. Price ($) $600 $500 $400 $300 $200 $100 0 (5,000, $550) 5,000 (10,000, $500) (11,000, $300) 10,000 Quantity 15,000 20,000 1) In one/two sentences, describe why an oligopolistic firm might face this situation (what is the name of the pricing strategy that leads to this situation?) 2) Compute the elasticities and revenues at all THREE points shown on the graph: (5000, 550), (10000, 500) and (11000,300). Elasticity (5000, $550) = (10000, $500) = (11000, $300) = Revenues (5000, $550) = $2,750,000 (10000, $500) = $5,000,000 (11000, $300) = $3.300.000

The following graph refers to a situation wherein an oligopolistic firm faces a kinked demand curve. Price ($) $600 $500 $400 $300 $200 $100 0 (5,000, $550) 5,000 (10,000, $500) (11,000, $300) 10,000 Quantity 15,000 20,000 1) In one/two sentences, describe why an oligopolistic firm might face this situation (what is the name of the pricing strategy that leads to this situation?) 2) Compute the elasticities and revenues at all THREE points shown on the graph: (5000, 550), (10000, 500) and (11000,300). Elasticity (5000, $550) = (10000, $500) = (11000, $300) = Revenues (5000, $550) = $2,750,000 (10000, $500) = $5,000,000 (11000, $300) = $3.300.000

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter24: Monopolistic Competition, Oligopoly, And Game Theory

Section24.3: Price And Output Under Cartel Theory

Problem 2ST

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