In the kinked demand curve oligopoly model, the assumption is that if one firm reduces its price, the other firms will:
A) lower their prices to stay competitive.
B) raise their prices to increase their profits.
C) hold their prices constant to maintain their market shares.
D) either lower their prices, raise their prices, or hold their prices constant.

Question

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In the kinked demand curve oligopoly model, the assumption is that if one firm reduces its price, other firms in the market will lower their prices to stay competitive, aiming to maintain their market share and prevent customers from switching to the competitor with the lower price.

In the Kinked Demand Curve Oligopoly Model, the Assumption Is