Assume That an Oligopolist Has a Kinked Demand Curve

question 8

Multiple Choice

Assume that an oligopolist has a kinked demand curve. Suppose that the marginal cost curve passes through the gap in the marginal revenue curve. This means price and output will be shown by a point:

• A) above the curve.
• B) below the curve.
• C) at the kink
• D) on the upper part of the curve.
• E) on the lower part of the curve.

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Definitions:

Injunction

A judicial order requiring a person or entity to do or cease doing a specific action.

Contract Law

A branch of law dealing with the formation, enforcement, and interpretation of agreements between parties.

Discharged by Agreement

The termination of contractual obligations through mutual consent of the parties involved.

Contract

A legally binding agreement between two or more parties that outlines obligations and rights of each party.