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Kit-N-Sit,Inc

Question 124

Multiple Choice

Kit-N-Sit,Inc.and Kittysitters,Inc.are two cat-sitting services in Kent,Ohio.There are no other cat-sitting services so the market is considered to be a duopoly.According to the kinked demand curve theory,if Kit-N-Sit,Inc.cuts prices,Kittysitters will __________; if Kit-N-Sit,Inc raises prices,Kittysitters,Inc.will __________.


A) do nothing and leave prices unchanged; do nothing and leave prices unchanged
B) do nothing and leave prices unchanged; cut prices
C) do nothing and leave prices unchanged; raise prices
D) cut prices; do nothing and leave prices unchanged
E) raise prices; do nothing and leave prices unchanged

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