Which of the following is not a characteristic of a kinked demand curve? A

Marketing Jan 12, 2021

Which of the following is not a characteristic of a kinked demand curve?

A. A range of marginal costs over which MR = MC

B. P < MC

C. Interdependence of rivals

D. Pricing at the kink

E. Demand curve discontinuous at the kink

Expert Solution

Which of the following is not a characteristic of a kinked demand curve? (D) Pricing at the kink. Because of the kink in the curve, the marginal revenue is horizontal for a range of prices, which results in the point where marginal cost and marginal revenue (the profit-maximizing output level) typically occurring at the kinked level of output. Because of this, the price tends to be at the point where the kink in the demand curve exists.

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