An Oligopolist's Effective Demand Curve Will Be Kinked If the Firm

question 132

Multiple Choice

An oligopolist's effective demand curve will be kinked if the firm

• A)is acting as a price leader in the industry.
• B)expects other firms to match price cuts but not price increases.
• C)expects other firms to match all price changes.
• D)fears new entry into the industry.

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Definitions:

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest payments from its earnings before interest and taxes.

Interest Expense

The cost incurred by an entity for borrowed funds, typically expressed as an annual rate.

Quick Assets

Liquid assets that can be rapidly converted into cash, excluding inventory, such as cash, marketable securities, and receivables.

Leverage

The use of borrowed capital or financial instruments to increase the potential return of an investment or project.