The Theory of the Kinked Demand Curve Is That

question 176

Multiple Choice

The theory of the kinked demand curve is that

• A)although the firm sells a differentiated product, too many competitors exist to make it worthwhile speculating on responses to the firm's behavior.
• B)freedom of entry will reduce profits to zero.
• C)a firm's competitors will follow it in a price decrease but not follow it in a price increase.
• D)firms are all seeking the position of joint profit maximization.

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Definitions:

Postsynaptic

Referring to the region of a neuron that receives and responds to neurotransmitters released from another neuron at a synapse.

AMPA Receptors

Ionotropic receptors in the brain that mediate fast synaptic transmission in the central nervous system, crucial for brain functions such as learning and memory.

Nerve Growth Factor

A protein essential for the growth and survival of certain neurons, playing a critical role in the development and maintenance of the nervous system.

Brain Injury

Physical damage to the brain, which can result in impaired mental or physical functioning.