The Kinked-Demand Curve of an Oligopolist Is Based on the Assumption

question 240

Multiple Choice

The kinked-demand curve of an oligopolist is based on the assumption that

• A)competitors will follow a price cut but ignore a price increase.
• B)competitors will match both price cuts and price increases.
• C)competitors will ignore a price cut but follow a price increase.
• D)there is no product differentiation.

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Definitions:

UCR

stands for Unconditioned Response, an automatic and natural reaction to an unconditioned stimulus, not learned or conditioned.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without prior learning or conditioning.

Salivary Glands

Glands located in the mouth that produce saliva, which aids in digestion and keeps the mouth moist.

Pavlov's Analysis

Pertains to the research and experiments conducted by Ivan Pavlov, especially his work on classical conditioning, demonstrating how dogs could be conditioned to respond to a stimulus that previously had no effect on them.