The assumption that rival firms will match a firm's price decreases but not its price increases is a basic feature of:

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The kinked demand curve model assumes that rival firms will not follow a price increase by a firm, but will match a price decrease. This is because the assumption is that consumers are more sensitive to price increases than price decreases, meaning that a price increase may result in a significant loss of demand for the firm that initiates it, while a price decrease may not necessarily result in a significant gain in demand.

The Assumption That Rival Firms Will Match a Firm's Price