This lesson covers Topic 4.5 in the AP Syllabus. Today we will study oligopoly using standard supply and demand analysis and a model known as the kinked demand theory.
Learning Target
Analyze the ways in which incentives influence what is produced and distributed in a market system.
Evaluate the extent to which competition among sellers and among buyers exists in specific markets.
Describe the consequences of competition in specific markets.
Criteria for Success
I will be able to use ideas related to non-collusive oligopoly and the kinked demand curve to analyze economic problems.
I will be able to demonstrate this understanding using a graph of the aforementioned model.
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Assignments
Read: Krugman (Section 11 Review and Section 12 Review).
Watch: The video lecture for today's topic (linked above).
Optional: This video (Old School Hopkins: Non-collusive Oligopoly) and the ones linked below.
Formative Assessment (MCQ's): You will take a formal assessment during class. The assessment will consist of multiple-choice questions and one FRQ from an old AP Exam. Doing the problem of the day and ensuring that you understand it will help you prepare for today's formative assessment and help to ensure that you understand the concepts in this lesson.
Problem of the Day
Do problem #1 in the "Problems and Applications" section at the end of Chapter 17.
Use the kinked demand model to explain why price wars are common in oligopolistic industries.