Under the kinked demand model, suppose the firm's demand curve shifts rightward but the price at which the kink occurs remains the same. In this case, the firm:

A) does not change its output.
B) increases output.
C) decreases output.
D) We do not have enough information to answer this question.

Question

Zybrea Knight · Accepted Answer

Final Answer : B, Explanation :  In the kinked demand model, if the firm's demand curve shifts rightward but the kink (the price) remains the same, it means that at the same price, the firm can now sell more quantity. Therefore, the firm increases its output to meet the higher demand at that price.

Under the kinked demand model, suppose the firm's demand curve shifts rightward but the price at which the kink occurs remains the same. In this case, the firm:

A) does not change its output.
B) increases output.
C) decreases output.
D) We do not have enough information to answer this question.

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Learning Objectives

Related questions

Under the kinked demand model, suppose the firm's demand curve shifts rightward but the price at which the kink occurs remains the same. In this case, the firm:A) does not change its output.B) increases output.C) decreases output.D) We do not have enough information to answer this question.

Definitions

Learning Objectives

Learning Objectives

Related questions

Under the kinked demand model, suppose the firm's demand curve shifts rightward but the price at which the kink occurs remains the same. In this case, the firm:

A) does not change its output.
B) increases output.
C) decreases output.
D) We do not have enough information to answer this question.