Which Statement Concerning the Kinked Demand Curve Model of Oligopoly

question 64

Multiple Choice

Which statement concerning the kinked demand curve model of oligopoly is false?

• A)It addresses the question of price "stickiness."
• B)It assumes when one oligopolist raises the price, all others will follow.
• C)The portion of the demand curve above the "kink" is more elastic than the portion below.
• D)The firm's marginal costs can sometimes shift without changing the profit-maximizing price and output.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.