Question

multiple choice question
in the ______ model of oligopoly, firms react to price decreases but ignore price increases by other firms.
o price leadership
o cost leadership
o collusion model
o kinked - demand

Explanation:

In the kinked - demand model of oligopoly, firms react to price decreases by competitors to avoid losing market share, but ignore price increases as they don't want to forgo potential profits from customers who are price - sensitive. Other models like price leadership, cost leadership, and collusion model do not have this characteristic behavior.

Answer:

D. kinked - demand