The Kinked-Demand Curve Model of Oligopoly

question 15

Multiple Choice

The kinked-demand curve model of oligopoly:

• A) suggests a firm's rivals will ignore a price cut but match a price increase.
• B) suggests small changes in unit costs will have no effect on equilibrium price and output.
• C) assumes a firm's rivals will match any price change it may initiate.
• D) assumes a firm's rivals will ignore any price change it may initiate.

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Definitions:

Survival

Survival refers to the ability to continue living or existing, often despite adversity or challenging circumstances.

Self-Actualization

A state of psychological fulfillment, including acceptance of self and others, accurate perception of reality, close relationships, personal autonomy, goal directedness, naturalness, need for privacy, orientation toward growth, sense of unity with nature, sense of brotherhood with all people, democratic character, sense of justice, sense of humor, creativity, and personal integrity.

Physical and Emotional Needs

Basic requirements that must be fulfilled to maintain physical health and emotional well-being, including food, shelter, love, and belonging.

Motivate Behavior

The process of influencing or encouraging individuals to act or behave in a certain way.