The theory of the kinked demand curve is that
A. although the firm sells a differentiated product, too many competitors exist to make it worthwhile speculating on responses to the firm’s behavior.
B. freedom of entry will reduce profits to zero.
C. a firm’s competitors will follow it in a price decrease but not follow it in a price increase.
D. firms are all seeking the position of joint profit maximization.
Answer: C
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For an individual, opportunity costs
a. decrease as consumption increases. b. include only the monetary costs of goods and services. c. reflect resource scarcity. d. reflect the fact that wants are unlimited. e. reflect the fundamental assumption that "more is better."
Suppose that the government imposes an excise tax on widgets. The portion of the tax borne by the buyer of widgets depends upon
a. elasticity of demand. b. income of buyers. c. size of the tax that is imposed. d. cross elasticity of demand between widgets and floogles.
After the United States dropped an atomic bomb on Japan, what do you expect happened to the yen?
a. The yen appreciated. b. The yen was unaffected. c. The yen depreciated. d. There is no way to predict the effect on the yen.
Which of the following is the best example of a public good?
A. inoculation against a contagious disease B. access to broadband networks C. a streetlight D. garbage collection