4) According to Kinked Demand theory                a) Firms incur losses                b) Firms have less revenue                c) An increase in price by the firm is not followed by others                d) None of the above

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter23: Price-searcher Markets With Low Entry Barriers
Section: Chapter Questions
Problem 17CQ
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Subject: Menagerial economics & policy

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4) According to Kinked Demand theory

               a) Firms incur losses

               b) Firms have less revenue

               c) An increase in price by the firm is not followed by others

               d) None of the above

5) If AFC is 40 and AVC is 80 then ATC is

               a) 40

               b) 120

               c) 100

               d) None of the above

6) The following statement about MC and AC is correct

               a) "When MC is falling , AC is falling "

               b) AC equals MC at MCs lowest point

               c) "When MC exceeds AC, AC must be rising "

               d) "When AC exceeds MC, MC must be rising "

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