If Output Is Set at the Kink of the Kinked-Demand

question 211

Multiple Choice

If output is set at the kink of the kinked-demand model, then there

• A)is a strong incentive for rivals to decrease prices.
• B)is a strong incentive for rivals to increase prices.
• C)is one price at which marginal revenue equals marginal cost.
• D)are several prices at which marginal revenue equals marginal cost.

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