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Kinked Demand Curve in Oligopoly Explained by kyakareyar is a document available to read on EtoBox.
The kinked demand curve model describes an oligopoly market with few firms producing close substitute products. The demand curve these firms face is not smooth, but has a kink at the prevailing price level. Above this price, the demand curve is elastic as competitors will not follow a price increase; below it is inelastic as competitors will follow a price decrease. This difference in elasticity creates a discontinuity in the firms
- Author
- kyakareyar
- Language
- EN