What Are the Assumptions of the Kinked Demand Curve Model

question 141

Essay

What are the assumptions of the kinked demand curve model? What is its main conclusion about oligopoly behavior?

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Definitions:

MSR

Mean Squared Regression, a measure used in statistical analysis to describe the amount of variance explained by a regression model.

MSE

Mean Squared Error, a measure of the average of the squares of the errors—that is, the average squared difference between the estimated values and the actual value.

F-statistic

A ratio used in statistical analysis to determine if the variances between two populations are significantly different.

F-test Statistic

A ratio of two variances that follows an F-distribution, used to compare sample variances and test hypotheses about the equality of population variances.