The kinked demand curve model is used to explain price rigidity in: MCQ with Answer and Explanation

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The kinked demand curve model is used to explain price rigidity in:

A. monopsony

B. perfect competition

C. monopoly

D. oligopoly

Answer: Option D

Solution (By JKSSB Mock Tests)

The kinked demand curve explains why oligopolistic firms avoid changing prices.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

Which of the following is an example of a transfer payment?

A. Interest paid on government borrowings

B. Payment for purchase of goods

C. Salary paid to government employees

D. Pension paid to retired employees

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Correct Answer: Option D

Explanation:
Transfer payments are unilateral payments for which no goods or services are received in return, such as pensions, scholarships and unemployment allowances. Interest on borrowings is also a transfer, but pension is a classic example.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Goods and Services Tax' on export of services is:

A. 18%

B. 5%

C. zero-rated

D. 28%

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Correct Answer: Option C

Explanation:
Export of services is zero-rated under GST.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Periodic Labour Force Survey' provides estimates of:

A. inflation

B. employment and unemployment

C. GDP

D. foreign exchange reserves

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Correct Answer: Option B

Explanation:
PLFS provides labour force, employment and unemployment estimates.

This question belongs to: Economy GK Economy Set 1

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