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financial economy (P1)<br />An ECONOMY using a variety of financial assets and services, other than money, for the purposes of exchange and storing value; a 'post-money' economy.<br /> <br /><em>Reference</em><br />Podolski, T.M. (1986) Financial Innovation and the Money Supply, Oxford: Basil Blackwell.
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kinked demand curve (Ll)<br />A curve shaped like a mansard roof describing the behaviour of non-collusive oligopolists. It is based on the idea that these oligopolists will follow each other in cases of price decreases but not when one of them raises prices. Thus a demand curve results which consists of the joining together of two demand curves - the demand curve of the firm which raises its prices and the industry demand curve. The theory, although suspect empirically, has been used to account for price rigidity in oligopolistic markets. In the figure the demand curve D up to output OK is ELASTIC and so, if a firm raises its price, total revenue will fall; beyond output OK the demand curve of the firm, which is also the industry's demand curve, is inelastic and so a decrease in price will lower total revenue also (AR is average revenue, MR is marginal revenue and MC is marginal cost). <br /><em>Reference</em><br />Hall, R.L. and Hitch, C.L (1939) 'Price theory and business behaviour', Oxford Economic Papers 2: 12-45.<br /> Reid, G.C. (1975) The Kinked Demand Curve Analysis of Oligopoly: Theory and Evidence, Edinburgh: Edinburgh University Press.<br /> Sweezy, P.M. (1939) 'Demand under conditions of oligopoly', Journal of Political Economy 47: 568-73.
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