The Kinked-Demand Curve Model of Oligopoly

question 91

Multiple Choice

The kinked-demand curve model of oligopoly

• A) assumes a firm's rivals will ignore a price cut but match a price increase.
• B) embodies the possibility that changes in unit costs will have no effect on equilibrium price and output.
• C) assumes a firm's rivals will match any price change it may initiate.
• D) assumes a firm's rivals will ignore any price change it may initiate.

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Definitions:

Double-Blind Experiment

An experimental design in which neither the experimenter nor the participants are aware of which participants are in the experimental group and which are in the control group until the results are calculated.

Experimental Group

The participants in an experiment who receive the drug or other treatment under study—that is, those who are exposed to the change that the independent variable represents.

Placebo Effect

A phenomenon in which a person experiences a physiological or psychological improvement after being given a treatment with no therapeutic value.

Anxiety Disorder

A category of mental health diagnoses that lead to excessive nervousness, fear, apprehension, and worry.