In the Kinked Demand Curve Model, the Kink in the Demand

question 24

Multiple Choice

In the kinked demand curve model, the kink in the demand curve arises because:

• A) the elasticity of the demand curve changes at the equilibrium output.
• B) there are no barriers to entry or exit in the industry.
• C) the demand for the good is unstable and keeps changing.
• D) the products sold by each firm in the market are different.