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11) The demand curve, which assumes that competitors will follow

Question : 11) The demand curve, which assumes that competitors will follow : 1921321

11) The demand curve, which assumes that competitors will follow price decreases but not price increases, is called

A) an industry demand curve.

B) an inelastic demand curve.

C) a kinked demand curve.

D) a competitive demand curve.

12) The kinked demand curve model best reflects

A) mutual interdependence among sellers.

B) a game theory approach to price-output decisions.

C) price rigidities in oligopolistic markets.

D) All of the above

13) In the kinked demand curve model, the demand curve is ________ for price increases and ________ for price decreases.

A) unit elastic; relatively elastic

B) relatively inelastic; relatively elastic

C) relatively elastic; relatively inelastic

D) perfectly elastic; perfectly inelastic

14) The existence of a kinked demand curve under oligopoly conditions may result in

A) price flexibility.

B) price rigidity.

C) competitive pricing.

D) None of the above

15) When a company is faced by a kinked demand curve, the marginal revenue curve

A) will be upward sloping.

B) will be horizontal.

C) will always be zero at the quantity produced.

D) will be discontinuous.

16) In which of these markets would the firms be facing the least elastic demand curve?

A) perfect competition

B) pure monopoly

C) monopolistic competition

D) oligopoly

17) Porter's "Five Forces Model" is based on

A) the laws of supply and demand.

B) the law of diminishing returns.

C) the Structure-Conduct-Performance model.

D) the key factors affecting demand.

18) The four-firm concentration ratio

A) indicates the total profitability among the top four firms in an industry.

B) is an indicator of the degree of monopolistic competition.

C) indicates the presence and intensity of an oligopoly market.

D) is used by the government as a basis for anti-trust cases.

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