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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