More inelastic
More elastic
Less elastic
Inelastic
Answer is Right!
Answer is Wrong!
The correct answer is: B. More elastic.
A kinked demand curve is a type of demand curve that is characterized by a sudden change in slope. The upper portion of the kinked demand curve is relatively more elastic than the lower portion. This is because, at the higher prices, the firm is more likely to face competition from other firms. As a result, the firm will be less able to raise prices without losing a significant number of customers. On the other hand, at the lower prices, the firm is less likely to face competition from other firms. As a result, the firm will be able to lower prices without losing a significant number of customers.
The following are the explanations of each option:
- A. More inelastic. This is incorrect because the upper portion of the kinked demand curve is relatively more elastic than the lower portion.
- B. More elastic. This is the correct answer because the upper portion of the kinked demand curve is relatively more elastic than the lower portion.
- C. Less elastic. This is incorrect because the upper portion of the kinked demand curve is relatively more elastic than the lower portion.
- D. Inelastic. This is incorrect because the upper portion of the kinked demand curve is relatively more elastic than the lower portion.