A Weakness of the Kinked Demand Curve Model of Oligopoly

question 181

Multiple Choice

A weakness of the kinked demand curve model of oligopoly is

• A)that marginal costs are frequently changing.
• B)it assumes that firms are reluctant to change prices.
• C)the marginal revenue curve is kinked at the market price.
• D)it does not explain how prices are determined.

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Definitions:

Reflection of Feelings

The practice of expressing back the emotions a speaker appears to be conveying, allowing them to explore these emotions further.

Company

A company is a legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

Budget Cutbacks

Reductions in the planned spending of a government, organization, or individual, usually to align expenses with available resources or revenues.

Angry

Feeling or showing strong annoyance, displeasure, or hostility.