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- Subject
- Marketeconomics-mcqs › market
- Published
- 31 May 2019
- Last updated
- 28 May 2026
What causes the kinked demand curve in an oligopoly market?
Multiple choice question for Market. Select an option, then review the explanation below.
Explanation
The kinked demand curve arises because an oligopolist expects competitors to react to price cuts by lowering their prices as well, but not to raise their prices when the oligopolist increases them. This asymmetric response leads to the characteristic kink in the demand curve.
More Market MCQs
Practice related questions from the same subject.
- 1.Broadcasting firms use satellite TV subscriptions and signal detection tools primarily to combat which issue?
- 2.Which of the following is a classic example of a public good?
- 3.Which of the following factors can lead to market failure?
- 4.When a neighbor burns yard debris and smoke enters your home, what type of externality does this represent?
- 5.Why is a competitive equilibrium considered Pareto efficient?