An oligopolist operating with a kinked demand curve would expect rivals to match its price:
a. increases.
b. decreases.
c. both a and b.
d. neither a nor b.
b
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According to the efficient markets hypothesis,
A) common stock prices should be constant. B) the price of a corporation's stock is likely to fluctuate substantially in response to news about changes in the company's short-term prospects. C) the price of a corporation's stock will fluctuate significantly only in response to news about changes in the company's long-term prospects. D) price fluctuations in common stock are a response to fads and are only infrequently the result of changes in the expected profitability of the companies involved.
Which of the following is a difference between least absolute deviations (LAD) and ordinary least squares (OLS) estimation?
A. OLS is more computationally intensive than LAD. B. OLS is more sensitive to outlying observations than LAD. C. OLS is justified for very large sample sizes while LAD is justified for smaller sample sizes. D. OLS is designed to estimate the conditional median of the dependent variable while LAD is designed to estimate the conditional mean.