The Kinked Demand Curve: Econ Concepts in 60 Seconds

The video tutorial by Mr. Cook from ACDC Econ explains the concept of oligopolies, focusing on the kinked demand curve in non-colluding oligopolies. It describes how firms react to price changes, highlighting that if one firm increases its price, others will ignore it, leading to elastic demand. Conversely, if a firm lowers its price, competitors will match it, resulting in inelastic demand. The tutorial uses a graph to illustrate these concepts, emphasizing the strategic behavior of firms in an oligopoly.

How do competitors react to a price change in a non-colluding oligopoly?

Discuss the elasticity of demand when a firm raises its price in a kinked demand curve.