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Use the Following Scenario to Answer the Following Questions

Question 31

Multiple Choice

Use the following scenario to answer the following questions:
Kit-N-Sit and Kittysitters 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 cuts prices,Kittysitters will ________; if Kit-N-Sit raises prices,Kittysitters will ________.


A) do nothing and leave prices unchanged; do nothing and leave prices unchanged
B) do nothing and leave prices unchanged; cut prices
C) do nothing and leave prices unchanged; raise prices
D) cut prices; do nothing and leave prices unchanged
E) raise prices; do nothing and leave prices unchanged

Correct Answer:

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