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The document discusses price rigidity under oligopolistic market structures using the concept of a kinked demand curve. It provides the following key points: 1) Under oligopoly, firms are interdependent and unlikely to change prices in response to rivals, leading to price rigidity. 2) A kinked demand curve model shows the demand curve is highly elastic for price increases but inelastic for decreases, so firms have no incentive to change prices from the kink point. 3) The resulting discontinuity in mar

Author

Kajal Mahajan

Language

EN