1.      The kinked-demand schedule that an oligopolist believes confronts the firm is given in the table below. Compute the oligopolist’s total revenue at each of the nine prices, and enter these figures in the table. Also compute marginal revenue for each unit between the nine prices and enter these figures in the table. From the table, (a) where is the “kink” in the demand curve? (b) what is the current selling price at that kink and how much output will be demanded? (c) what is the range of marginal cost that will keep the price set at the kink?

Price

Quantity demanded

Total Revenue

Marginal Revenue per Unit

$5.80

50

$____

 

5.60

100

____

$____

5.40

150

____

____

5.20

200

____

____

5.00

250

____

____

4.80

264

____

____

4.60

279

____

____

4.40

288

____

____

4.20

300

____

____

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