Which Statement Concerning the Kinked Demand Curve Model of Oligopoly

question 84

Multiple Choice

Which statement concerning the kinked demand curve model of oligopoly is false?

• A) It addresses the question of price "stickiness."
• B) It assumes when one oligopolist raises the price, all others will follow.
• C) The portion of the demand curve above the "kink" is more elastic than the portion below.
• D) The firm's marginal costs can sometimes shift without changing the profit-maximizing price and output.

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Definitions:

Unreasonable Risks

Risks that are not justifiable in context, often exceeding the potential benefits or involving dangers that could have been avoided with prudent judgment.

Logic

The science that investigates the principles governing correct or reliable inference and reasoning.

Psychology

The scientific study of mind and behavior, including the examination of consciousness, perception, emotions, and interpersonal relationships.

Certainty

The state of being sure or confident about something, often implying a lack of doubt.