Question

Kit-n-sit, inc. and kittysitters, inc. are two cat-sitting services in kent, ohio. there are no other cat-sitting services so the market is considered to be a duopoly. according to the kinked demand curve theory, if kit-n-sit, inc. increases prices, kittysitters, inc. will:

Answer 1

As in Business, the objective is to maintain and protect the market share and the revenue of the company. In this situation, following the kinked-demand curve theory, kittysitters, inc. is not likely to follow the price increase of kit-n-sit, inc. It is likely that they other retain their current price, or decrease the price of their services further to be able to be more competitive in the market.