Q
A major weakness of the kinked demand curve model of oligopoly is that ?
-
A
A. It assumes that firms believe that their rivals will not respond to any price change they initiate
-
B
B. It fails to explain how a firm arrived at its price and output decision initially
-
C
C. The model cannot be tested empirically.
-
D
D. Real-world pricing strategies are more simple than those assumed in this model
Correct Answer:
B. B. It fails to explain how a firm arrived at its price and output decision initially
