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

question 254

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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Definitions:

Limbs

The arms and legs of a human or the analogous appendages in other animals, used for movement and manipulation.

Digits

The numbers from 0 to 9 used in counting and calculations, and also refer to the fingers and toes in humans.

Movement

The action or process of moving or being moved, pertinent to physical processes and mechanics within biological systems.

Glabrous Skin

Areas of the skin that are naturally hairless, such as the palms of the hands and the soles of the feet.