Refer to the graph shown. If a firm operating as if it were faced with a kinked demand curve believes that if it raises price from P₂ to P₁, its rival will not go along, then: A) the demand curve used by the firm for decision making is highly inelastic. B) it probably won't raise price, since doing so would cause sales to drop from Q₃ to Q₁. C) it probably will raise price, since lower output means lower costs and greater profit. D) D₂ 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 raises price from P₂ to P₁, its rival will not go along, then: A) the demand curve used by the firm for decision making is highly inelastic. B) it probably won't raise price, since doing so would cause sales to drop from Q₃ to Q₁. C) it probably will raise price, since lower output means lower costs and greater profit. D) D₂ is the relevant demand curve.

Refer to the Graph Shown