12th Class Economics Solved Paper - Economics 2015 Outside Delhi Set-II

  • question_answer
    Explain the implication of non-price competition in an oligopoly market.

    Answer:

    Non-price competition in an oligopolistic implies that the demand curve faced by an oligopolistic firm cannot be determined as it is uncertain to forecast its sales. This is because any change in the price or output decisions by a firm sets in a series of reaction of the rival firms. That is why the demand curve is indeterminate and indefinite. The oligopolistic firm faces a kinked demand curve at any given price. The following figure shows the demand curve faced by an oligopolistic firm.  
                The upper portion of this demand curve is more elastic than the lower portion of the demand curve.


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