Re: Gokhale Model Paper I

Posted by Granpa Simpson on Jun 05, 2014; 4:14am
URL: http://discussion-forum.276.s1.nabble.com/Gokhale-Model-Paper-I-tp7591016p7591486.html

Sorry Anjali it was my error.. i meant d only for the kinked demand curve model, but by mistake i wrote b..again the logic remains the same, since it is a form of price competition so the other firms do not react on price increase while they react when there is a price decrease. This occurs because the demand curve is highly elastic above the kink while it is inelastic below the kink.