Q333
The upper portion of the kinked demand curve is relatively
A.
More inelastic
B.
More elastic
AnswerC.
Less elastic
D.
Inelastic
Answer: Option B
Solution
Answer: Option B
Solution:
The upper portion of the kinked demand curve is relatively more elastic. The kinked-demand curve is a demand curve comprised of two segments, one that is relatively more elastic, which results if a firm increases its price, and the other that is relatively less elastic, which results if a firm decreases its price. These two segments are joined at a corner or "kink."