According to the kinked demand curve model, what is assumed about a firm's price increase?

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Other firms do not match the firm's price hikeRival companies respond by raising their prices as wellCompetitors react by lowering their pricesCompanies cooperate to set a common price

Explanation

The kinked demand curve theory posits that if a firm raises its price, competitors typically do not follow suit, leading to a loss of customers for the price-increasing firm. Conversely, if a firm lowers its price, rivals are expected to match the decrease to maintain market share.