Asked by

Kevin Reich
on Oct 25, 2024

verifed

Verified

In the kinked demand curve model, if one firm reduces its price:

A) other firms will also reduce their price.
B) other firms will compete on a non-price basis.
C) other firms will raise their price.
D) Both A and B are correct.
E) Both B and C are correct.

Kinked Demand Curve Model

A model in economics illustrating how firms in oligopoly markets might maintain stable prices despite changes in cost or demand, due to the asymmetric responses of rivals to price changes.

Price Reduction

A decrease in the selling price of goods or services, often to attract more buyers or respond to market conditions.

  • Investigate the underlying principles and effects related to the kinked demand curve model.
verifed

Verified Answer

HL
Hanno LabuschagneOct 30, 2024
Final Answer:
Get Full Answer