The kinked-demand curve model helps to explain price rigidity because

A) there is a gap in the marginal revenue curve within which changes in marginal cost will not affect output or price.
B) demand is inelastic above and elastic below the going price.
C) the model assumes firms are engaging in some form of collusion.
D) the associated marginal revenue curve is perfectly elastic at the going price.

Kinked-demand Curve Model

An economic model that suggests prices in an oligopoly are stable because firms will match price decreases but not price increases by competitors.

Marginal Revenue Curve

Represents the additional income gained from selling one more unit of a product or service, crucial for determining optimal production levels in microeconomics.

Marginal Cost

The boost in aggregate costs that comes from generating one extra unit of a product or service.