According to the kinked demand curve theory of sticky prices, in an oligopolistic market:
A. a price decrease by one firm will not be followed by the other firms.
B. the kinked demand curve is inelastic in the upper portion and elastic in the lower portion of the curve.
C. the kinked demand curve is elastic in the upper portion and inelastic in the lower portion of the curve.
D. a price increase by one firm will be followed by the other firms.
Answer: C
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AD2 shows a(n) ______.
a. decrease in real GDP demanded
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c. decrease in price level
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