Question

4. What is the difference absolute and relative poverty?

5. What has happened to absolute poverty in the US since 1960?

6. Show graphically and explain the kinked demand curve theory of oligopoly. What implication does the kinked demand curve model have for oligopolistic prices?

Answer 1

Technically speaking the poverty is the experience for the academic study the concept of the defined as follows

Absolute poverty is a situation of the household income is below necessary level to maintain basic living standards food, clothing shelter

The relative poverty is a situation the standard of living consider with other based on needs, and income of the households.

5) According to the statistics, the poverty is more in 1950 and absolute poverty s less in 1960

6) The below the diagram showing the kinked demand curve under oligopolistic market firm produce the differentiated good hence changes in the price does not increase the demand due to consumers taste and preference.

The below the diagram shows that portion Of P level demand is elastic and below the P is less elastic because changes in the price consumers demand does not increase.