In the circular flow model, households demand resources such as labor services in the factor market

Exhibit 10-4 Kinked demand curves In Exhibit 10-4, the exhibit represents a kinked-demand oligopoly model. Suppose the current price is $50. If one firm in the oligopoly now attempts to raise price, all firms will:

A. follow along demand curve D1. B. follow along demand curve D2. C. ignore this price increase and cause the price-raising firm to move along D1. D. ignore this price increase and cause the price-raising firm to move along D2.

The assumption under perfect competition of a "homogeneous product" means that

A. that no firm can charge more than another for its product. B. the good one firm produces is very different than the good another produces. C. the good one firm produces is exactly the same as the good another firm produces. D. that no buyer will pay more for one firm's good than another's.