The Key Disadvantage of the Kinked-Demand Model Is That It

question 19

Multiple Choice

The key disadvantage of the kinked-demand model is that it:

• A) explains why firms may collude, but it does not explain how they interact.
• B) does not explain why prices may be rigid in an oligopoly.
• C) requires the assumptions of perfect competition.
• D) only holds under price leadership.

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Definitions:

Evil Scientist

A fictional or stereotypical portrayal of a scientist who uses their knowledge for harmful or immoral purposes.

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A structure in the brain that acts as a relay station, processing and transmitting information to various parts of the brain.

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Areas of the brain, notably within the limbic system, that are believed to be responsible for the sensation of pleasure elicited by certain activities or substances.