Author Question: The key disadvantage of the kinked-demand model is that it: A) explains why firms may collude, ... (Read 26 times)

ss2343 · **on:** Jul 1, 2018

The key disadvantage of the kinked-demand model is that it:

A) explains why firms may collude, but it does not explain how they interact.
B) does not explain why prices may be rigid in an oligopoly.
C) requires the assumptions of perfect competition.
D) only holds under price leadership.

Question 2

Refer to Figure 9.8. If free trade in sugar is allowed, consumer surplus will be

A) 175.
B) 250.
C) 30,625.
D) 61,250.
E) 62,500.