Economics Readings Site By Colin Ong

This blog has been created to provide an area for economics students to read about how economics impacts daily life. It is especially useful for students to understand the application of macroeconomics as communicated through the media and governmental websites.

This online resource has been set up for educational purposes.All rights are reserved by the various websites.

For further clarification, please email colin@mrmc.com.sg

Brief description: One possible theory of oligopolistic behaviour is the kinked demand curve theory. The equilibrium of a firm in this situation will be where marginal cost equals marginal revenue.

Detailed description: The marginal revenue curve associated with a kinked demand curve will be discontinuous and have a vertical section. The marginal cost curve can shift anywhere along this section and there will be no change in the equilibrium price and output.