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A Simple Proof of Sweezy's 'Kinked-Demand' Conjecture

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  • R. Rothschild

Abstract

This paper identifies conditions on the substitutability of product varieties, market price, and the number of firms in the industry, that ensure the existence of the conjectural equilibrium postulated by P. M. Sweezy (1939) and referred to as the "kinked demand curve." The authors show that the equilibrium thus identified will, under certain conditions, be robust in the face of changes in cost. Copyright 1992 by Scottish Economic Society.
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  • R. Rothschild, "undated". "A Simple Proof of Sweezy's 'Kinked-Demand' Conjecture," Working Papers ec3/91, Department of Economics, University of Lancaster.
    • Handle: RePEc:wuk:lanedp:ec3/91
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    Cited by:

    1. R. Rothschild, 2010. "Kinked Demand Curves," Chapters, in: Mark Blaug & Peter Lloyd (ed.), Famous Figures and Diagrams in Economics, chapter 19, Edward Elgar Publishing.
    2. Michael Bradfield, 2007. "The Kinked Demand Curve with a Conjectural Hitch – A Micro Extension with Macro Implications," Working Papers daleconwp2007-05, Dalhousie University, Department of Economics.

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