Which of the Following Statements Is Correct Concerning the Kinked-Demand

question 132

Multiple Choice

Which of the following statements is correct concerning the kinked-demand curve variant of oligopoly theory?

• A)It assumes that the portion of the demand curve above the kink is elastic and the portion below the kink is inelastic.
• B)It assumes that the portion of the demand curve above the kink is inelastic and the portion below the kink is elastic.
• C)It assumes that the marginal costs of all firms are the same.
• D)It assumes that while the some firms will charge the same price they may produce different outputs.
• E)It assumes that while the some firms will produce the same output they will charge different prices.

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