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Basic Oligopoly Models - Ford

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Ford executives recently announced that the company would extend its most dramatic consumer incentive program in the company's long history - the Ford Drive America Program. The program provides consumers with either cash back or 0 percent financing for new Ford vehicles. As the manager of a Ford/Lincoln/Mercury franchise, how would you expect this program to impact your firm's bottom line? Explain.

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Auto makers function in a non-collusive oligopoly, where each firm must carefully watch the actions of its competitors. A kinked demand curve is usually used to model ...