
Assume the firms firms operating in an oligopolistic market experience a relatively small change in marginal costs.According to the kinked demand curve model this would:
A) cause a large change in the profit-maximizing level of output.
B) leave the equilibrium price unchanged.
C) cause the profit-maximizing level of output to change by the same amount and in the same direction.
D) cause the profit-maximizing price to change by the same amount but in the opposite direction.
Correct Answer:
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