According to the kinked demand curve model, an oligopolist may face
A. more elastic demand than a monopolistic competitor.
B. less elastic demand than a monopolistic competitor.
C. more elastic demand if she raises her price than if she lowers her price.
D. less elastic demand if she raises her price than if she lowers her price.
Answer: C
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In the figure above, a movement from point A to point C can be the result of
A) an increase in the government budget deficit. B) a decrease in expected profit. C) a rise in the real interest rate. D) an increase in expected profit. E) a fall in the real interest rate.
If, in response to an increase in the price of chocolate the quantity of chocolate demanded decreases, economists would describe this as
A) a change in consumer income. B) a decrease in quantity demanded. C) a decrease in demand. D) a decrease in consumers' taste for chocolate.