GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Under kinked demand model, the demand curve for the firm’s product is drawn on the assumption that
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All rivals charge a price independent of the price charged by the oligopolist
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All rivals follow the oligopolist upto certain price but beyond that they do not
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All rivals charge the same price which is charged by the oligopolist
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All oligopolist charges the price as independent sellers
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Explanation:
Detailed explanation-1: -One example of a kinked demand curve is the model for an oligopoly. This model of oligopoly suggests that prices are rigid and that firms will face different effects for both increasing price or decreasing price.
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