[Solved] In What Way Does the Theory of the Kinked-Demand Curve

Question 69
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In what way does the theory of the kinked-demand curve explain price stability in an oligopoly industry?

A)Because if the firm either raises or lowers its price,its total revenue will decrease.
B)It assumes that rival firms will match any price increase and ignore any price decrease.
C)It assumes that firms are in collusion with each other.
D)It assumes that demand is inelastic above the established price and elastic below it.


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