An Oligopolist's Effective Demand Curve Will Be Kinked If the Firm

question 132

Multiple Choice

An oligopolist's effective demand curve will be kinked if the firm

• A)is acting as a price leader in the industry.
• B)expects other firms to match price cuts but not price increases.
• C)expects other firms to match all price changes.
• D)fears new entry into the industry.

---

Definitions:

Consolidated Balance Sheet

A financial statement combining all assets, liabilities, and equity of a parent company and its subsidiaries, presenting the financial position of the entire group.

Fair Values

A measure of the estimated market value of an asset or liability, based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction.

Consolidated Financial Statements

Financial statements that aggregate the financial information of a parent company and its subsidiaries into one comprehensive document.

Wholly Owned Subsidiaries

Companies whose entire share capital is 100% owned by another company, which gives the parent company full control over the subsidiary.