Assignment:
Oligopoly and Demand Curves
• You have just been hired by a company as an economist and strategic planner. Your company has asked you to generate a report explaining the consequences of the market structure in which the company operates. Assume that the market structure is an oligopoly. Explain to management how this structure could influence decision making, especially pricing, output, advertising, and the use of resources in an oligopolistic market, as compared to other market structures.
• Outline what the kinked demand curve model of oligopoly seeks to explain. What are the major points of this theory? How does the kinked demand theory of oligopoly differ from other theories in terms of explaining the behavior of companies in an oligopoly? Explain the role of your company if it is considered the dominant company in the industry in terms of price leadership. Suggest and justify whether any other role should be recommended.
Justify your choices with valid assumptions and logically driven arguments. Cite any sources using APA format.