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Which statement concerning the kinked demand curve model of oligopoly is false? The portion of the demand curve above the "kink" is more elastic than the portion below. The firm's marginal costs can sometimes
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27 votes
27 votes
Which statement concerning the kinked demand curve model of oligopoly is false? The portion of the demand curve above the "kink" is more elastic than the portion below. The firm's marginal costs can sometimes shift without changing the profit-maximizing price and output. It assumes when one oligopolist raises the price, all others will follow. It addresses the question of price "stickiness."

User Stepan Sanda
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14 votes
14 votes

Answer: It assumes when one oligopolist raises the price, all others will follow

Step-by-step explanation:

An oligopoly is a form of market where there are dominated by few group of large sellers.

A kinked demand curve simply happens when the elasticity is not thesame for the lower and higher prices and the demand curve isn't a straight line.

It simply suggests that there are rigid prices and assumes when one oligopolist raises the price, all others will follow.

User Martin Tonev
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