Answered
The kinked-demand curve model helps to explain price rigidity because:
A) there is a gap in the marginal revenue curve within which changes in marginal cost will not affect output or price.
B) demand is inelastic above and elastic below the going price.
C) the model assumes firms are engaging in some form of collusion.
D) the associated marginal revenue curve is perfectly elastic at the going price.
On Sep 23, 2024