In the Kinked-Demand Model of Noncollusive Oligopoly,each Firm Thinks the Demand

question 155

Multiple Choice

In the kinked-demand model of noncollusive oligopoly,each firm thinks the demand curve below the going price is:

• A) more elastic than the demand curve above the going price.
• B) less elastic than the demand curve above the going price.
• C) more elastic than the marginal revenue curve above the going price.
• D) less elastic than the marginal revenue curve above the going price.

---

Definitions:

Income

The money received, typically on a regular basis, for work or through investments.

Utils Per Dollar

A hypothetical measurement of the utility or satisfaction a consumer gains from spending one dollar on a good or service.

Risk-Averse

Characteristic of preferring to avoid risk, leading to preference for safer, more certain outcomes over riskier ones.

Marginal Utility

The additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.