Exhibit 9-3 Kinked Demand Curves

Exhibit 9-3 Kinked demand curves

-In Exhibit 9-3,the exhibit represents a kinked-demand oligopoly model.Suppose the current price is $50.If one firm in the oligopoly now attempts to lower its price,all firms will:

A) follow along demand curve D1.
B) follow along demand curve D2.
C) ignore this price decrease and cause the price-reducing firm to move along D1.
D) ignore this price decrease and cause the price-reducing firm to move along D2.
E) raise their prices.