A major weakness of the kinked demand curve model of oligopoly is that?
Ait assumes that firms believe that their rivals will not respond to any price change they initiate
BReal-world pricing strategies are more simple than those assumed in this model
Cit fails to explain how a firm arrived at its price and output decision initially
DThe model cannot be tested empirically.
Correct answer
C. it fails to explain how a firm arrived at its price and output decision initially
Explanation
The correct answer is it fails to explain how a firm arrived at its price and output decision initially.