9. Refer to the example below. Provide a clear explanation for why an oligopoly faces a kinked demand curve. Price ($) $600 $500 $400 $300 $200 $100 0 0 (5,000, $550) 5,000 (10,000, $500) (11,000, $300) 10,000 Quantity 15,000 20,000

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12. Consider a duopoly market. Two firms are selling identical products and all costs are assumed to be zero for simplicity. Market demand schedule is given in the following table. Note that firms always choose an integer value for the quantity of production. Quantity Price Total Profit 3 $12 4 11 5 8 6 6. 7 4 8 2 1 10 a. Fill in the column of total profit.

7. Comparing monopoly and perfect competition Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium, with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply curves (S= MC) in the market for hot dogs. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from perfect competition. PRICE AND COSTS (Dollars per hot dog) 0.5 བྷྲ ༷ ྴ་ཤཱ་བྷ་ཛྙྰ་བླླ་ཤཱ་བ། 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.0 0 0 30 60 90 Perfect Competition S=MC D 120 150 180 210 240 270 300 QUANTITY (Hot dogs) PC Outcome Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs within the city limits. This firm buys up all the rest of the hot dog vendors in the city and operates as a monopoly. Assume…