One Shortcoming of the Kinked-Demand Curve Model of Oligopoly Is

question 134

Multiple Choice

One shortcoming of the kinked-demand curve model of oligopoly is it does not explain:

• A) why the marginal revenue curve is kinked.
• B) how the going price gets determined in the first place.
• C) what the equilibrium level of profits is for the firm.
• D) why the firm is a least-cost producer.

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Definitions:

National Debt

The total amount of money that a country's government has borrowed, typically from domestic or international lenders.

Balanced Budget

A balanced budget occurs when a government's total expenditures are equal to its total revenues within a specified period, avoiding deficits and surpluses.

Recession

A temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Transfer Payments

Payments made by governments to individuals without any goods or services being received in return, such as welfare, social security, and unemployment benefits.