Faced with a kinked demand curve,what action will an oligopolist take if the costs of production increase?

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In an oligopolistic market characterized by a kinked demand curve, firms are generally reluctant to change prices because of the uncertain reactions of competitors. The kinked demand curve model suggests that if one firm raises its prices, others may not follow, leading to a loss in market share for the firm that increased its prices. Conversely, if a firm lowers its prices, competitors are likely to match the price cuts, leading to a potential price war without significant gains in market share. Therefore, faced with increased production costs, an oligopolist might choose not to adjust prices unless the increase in costs is very significant, at which point the firm might be forced to reconsider its pricing strategy to maintain profitability.

Faced with a Kinked Demand Curve,what Action Will an Oligopolist