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

question 35

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.