The Theory of the Kinked Demand Curve Is That

Multiple Choice

The theory of the kinked demand curve is that

A) although the firm sells a differentiated product, too many competitors exist to make it worthwhile speculating on responses to the firm's behavior.
B) freedom of entry will reduce profits to zero.
C) a firm's competitors will follow it in a price decrease but not follow it in a price increase.
D) firms are all seeking the position of joint profit maximization.