The Kinked Demand Curve Model Assumes That If a Firm

question 162

Multiple Choice

The kinked demand curve model assumes that if a firm raises its price, then its rivals will _____ the price increase, but if a firm lowers its price, its rivals will _____ the price decrease.

• A) ignore; ignore
• B) match; match
• C) ignore; match
• D) match; ignore

---

Definitions:

Inventory Turnover

A financial metric measuring the rate at which a company sells and replaces its stock of goods during a particular period.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor expenses.

Merchandise Inventory

The total value of goods held by a company for the purpose of resale during the normal course of business operations.

Segment Disclosures

Financial reporting that breaks down a company's operations by divisions, products, or geographical markets to provide insight into performance.