CA CPT Model Test Paper 1 with solutions for online practice

Question : 139 of 201

Marks: +1, -0

The kinked demand curve model of oligopoly assumes that:

response to a price increase is less than the response to a price decrease
response to a price increase is more than the response to a price decrease
elasticity of demand is constant regardless of whether price increases or decreases
elasticity of demand is perfectly elastic if price increases and perfectly inelastic if price decreases

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