The Kinked-Demand Curve Model of Oligopoly Is Useful in Explaining

question 99

Multiple Choice

The kinked-demand curve model of oligopoly is useful in explaining:

• A) the way that collusion works.
• B) why oligopolistic prices and outputs are extremely sensitive to changes in marginal cost.
• C) why oligopolistic prices might change only infrequently.
• D) the process by which oligopolists merge with one another.

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Definitions:

Relevant Issues

Matters or topics that are significantly related to or affecting a particular subject or context.

Myth Of The "fixed Pie"

A misconception that in negotiations, the available resources or benefits are limited and cannot be expanded, leading to a win-lose situation.

Distributive Assumption

In decision-making and economic theory, the assumption concerning how resources or wealth are distributed among members of a society.

Gaining Party

The entity in a transaction or situation that achieves an advantage or benefit.