In the kinked demand curve theory, price elasticity of demand is at prices above the kink than below the kink. It follows that a price hike above the kink will reduce quantity demanded by than a price cut below the kink will quantity demanded.

In the kinked demand curve theory, price elasticity of demand is GREATER at prices above the kink than below the kink.

It follows that a price hike above the kink will reduce quantity demanded by A PROPORTIONALLY HIGHER AMOUNT than a price cut below the kink will REDUCE IN A LESS THAN PROPORTIONAL AMOUNT THE quantity demanded.

Explanation:

A kinked demand curve refers to a demand curve that is not a straight line, and the price elasticity of demand varies depending on the price of the goods or services. The kinked demand curve model is generally used when trying to explain how oligopolies exist and why their prices tend to be sticky or rigid above the kink of the curve (due to higher price elasticity).

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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