Asked by
Logan Kasallis
on Oct 12, 2024
Verified
If your competitors will follow your price cuts and ignore price hikes,your firm
A) faces perfect competition.
B) faces a kinked demand curve.
C) is the marginal price leader of an oligopoly.
D) must be the most efficient firm in the industry.
Kinked Demand Curve
A demand theory in oligopolistic markets where firms face a steeper demand curve for price increases and a flatter curve for price decreases due to competitive pricing behaviors.
Price Cuts
Reductions in the selling price of goods or services, often used as a strategy to increase demand or market share.
- Gain insight into the notion and ramifications of the kinked demand curve in oligopolistic market structures.
Verified Answer
NM
Learning Objectives
- Gain insight into the notion and ramifications of the kinked demand curve in oligopolistic market structures.