Refer to the graph shown. If a firm operating as if it were faced with a kinked demand curve believes that if it lowers price from P₂ to P₄, its rival will match the price cut, then: A) the demand curve used by the firm for decision making is highly elastic. B) it probably will lower price, since doing so will increase sales. C) it probably won't lower price, since the percentage decline in price will exceed the percentage increase in quantity sold. D) D₁ is the relevant demand curve.

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The Answer of Refer to the graph shown. If a firm operating as if it were faced with a kinked demand curve believes that if it lowers price from P₂ to P₄, its rival will match the price cut, then: A) the demand curve used by the firm for decision making is highly elastic. B) it probably will lower price, since doing so will increase sales. C) it probably won't lower price, since the percentage decline in price will exceed the percentage increase in quantity sold. D) D₁ is the relevant demand curve.

Refer to the Graph Shown