Refer to Figure 25.1 for an oligopoly firm. Assume that the existing price and quantity are $10 and 2,000 units. Which of the following statements is most likely correct?

A. Demand curves D1 and D2 both assume that rivals will not match any price changes.
B. Demand curve D1 assumes that rivals match any price changes.
C. Demand curves D1 and D2 both assume that rivals match any price changes.
D. Demand curve D2 assumes that rivals match any price changes.


Answer: B

Economics

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