The kinked demand curve model is based on the assumption that rival firms will match a price cut but ignore a price increase.

Name: The kinked demand curve model is based on the assumption that rival firms will match a price cut but ignore a price increase.
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The kinked demand curve model assumes that rival firms will match a price cut, resulting in a highly elastic demand curve for price decreases, but will ignore a price increase, leading to a relatively inelastic demand curve for price increases.

The Kinked Demand Curve Model Is Based on the Assumption