Multiple choice

Under an oligopolistic market, a rise in price is

  1. always matched

  2. generally unmatched

  3. always by 10%

  4. none of these

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In oligopoly markets (especially under the kinked demand curve model), when one firm raises prices, competitors typically do not follow to gain market share. This makes price increases generally unmatched, unlike price cuts which are quickly matched.

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