The kinked-demand curve model of oligopoly:
A. assumes a firm's rivals will ignore a price cut but match a price increase.
B. embodies the possibility that 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.
Answer: B
You might also like to view...
If labor costs rise at the same time that the federal government decreases its purchases, in the short run
A) aggregate output and the price level will both increase. B) aggregate output will increase, but the price level will fall. C) aggregate output and the price level will both fall. D) aggregate output will fall, but the price level may either increase or decrease.
A firm's minimum efficient scale occurs where the long-run average total cost curve reaches its minimum
a. True b. False
If a market is narrowly defined, a product is likely to have fewer substitutes and demand for the product will be less elastic
a. True b. False Indicate whether the statement is true or false
In the above figure, the distance between A and B represents this monopoly firm's
A. average profit per unit. B. average cost per unit. C. total profit. D. total revenue.