1. Oligopoly Which of the following statements is not correct about the kinked d

Question

1. Oligopoly Which of the following statements is not correct about the kinked demand curve model? A. The kinked demand curve model is used to explain noncooperative behavior of oligopoly firms. B. The kinked demand curve model is criticized for assuming that prices are more 'sticky' in oligopoly markets. C. The kinked demand curve model assumes that managers of one firm want to behave in such a way as to maximize the profits of the other firms D. The kinked demand curve model is based on two demand curves. 2. Monopolistic competition All of the following are examples of monopolistic competition except A. independent drugstores B. restaurants C.automobile companies D. hair salons

Explanation / Answer

a) "C"

The kinked demand curve model assumes that managers of one firm want to behave in such a way as to maximize the profit of other firms. They want to maximize their own profit.

b) "C"

Automobile companies are an example of an oligopoly market.

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