In the kinked demand curve model, if one firm reduces its price:
A) other firms will also reduce their price.
B) other firms will compete on a non-price basis.
C) other firms will raise their price.
D) Both A and B are correct.
E) Both B and C are correct.

Question

Quizplus · Accepted Answer

In the kinked demand curve model, if one firm reduces its price, other firms in the oligopoly are likely to reduce their prices as well to maintain their market share, leading to a more competitive pricing environment.

In the Kinked Demand Curve Model, If One Firm Reduces