Consider the relationship between a kinked demand curve and the corresponding marginal revenue curve. Below the point where the kinked demand curve has its characteristic kink, the marginal revenue curve is
A) positively sloped
B) a horizontal line
C) a vertical line
D) discontinuous
E) nonexistent because of the kink

Question

Quizplus · Accepted Answer

The marginal revenue curve corresponding to a kinked demand curve is discontinuous below the kink. This discontinuity arises because the slope of the demand curve changes at the kink, leading to a sudden jump in marginal revenue at that point.

Consider the Relationship Between a Kinked Demand Curve and the Corresponding