Assume that an oligopolist faces a kinked demand curve. Suppose that the marginal cost curve passes through the gap in the marginal revenue curve. Price and output will be determined

a. drawing a line from the point where MC = P to both the vertical and horizontal axis, the vertical indicating output, the horizontal indicating price
b. drawing a line from the point where MC = P to both the vertical and horizontal axis, the vertical indicating price, the horizontal indicating output
c. at the kink
d. at ATC = MC which, too, passes through the gap
e. to be zero because the MC curve passes through the gap


C

Economics

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