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-Suppose in Exhibit L-3, Representing the Demand Curves That Make

Question 191

Multiple Choice

-Suppose in Exhibit L-3, representing the demand curves that make up a firm's kinked demand curve, that price is $50. If the firm cuts the price, it will then A) follow along demand curve D<sub>1</sub> B) follow along demand curve D<sub>2</sub> C) find that the other firms will ignore the price decrease so that the price-raising firm will face D<sub>1</sub> D) find that the other firms will ignore the price decrease so that the price-raising firm will face D<sub>2</sub> E) find that the other firms will raise their prices
-Suppose in Exhibit L-3, representing the demand curves that make up a firm's kinked demand curve, that price is $50. If the firm cuts the price, it will then


A) follow along demand curve D1
B) follow along demand curve D2
C) find that the other firms will ignore the price decrease so that the price-raising firm will face D1
D) find that the other firms will ignore the price decrease so that the price-raising firm will face D2
E) find that the other firms will raise their prices

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