why-do-shifts-in-marginal-cost-within-a-certain-range-not-affect-price-and-quant

Question

Why do shifts in marginal cost within a certain range not affect price and quantity in a kinked-demand scenario?

Accepted Answer

Because the kink in the demand curve creates a range of marginal costs that do not alter equilibrium.

Answer

Because demand is perfectly elastic within this range.

Answer

Because firms are unable to change production levels.

Answer

Because marginal cost is irrelevant in oligopolistic markets.