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Use the Following Scenario to Answer the Following Questions

Question 157

Multiple Choice

Use the following scenario to answer the following questions:
Kit-N-Sit and Kittysitters are two cat-sitting services in Kent,Ohio.There are no other cat-sitting services,so the market is considered to be a duopoly.
-According to the kinked demand curve theory,if Kit-N-Sit cuts prices,Kittysitters will


A) do nothing and leave prices unchanged.
B) sue Kit-N-Sit for monetary damages in court.
C) respond aggressively by increasing prices drastically.
D) respond aggressively by increasing prices moderately.
E) respond aggressively by cutting prices.

Correct Answer:

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