The kinked demand curve model of oligopoly suggests that if one ﬁrm increases its price then the other ﬁrms will do the same.

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According to the kinked demand curve model, if one firm increases its price, the other firms will not necessarily follow suit. This is because if the firm raises its price too much, its market share may decrease significantly as consumers switch to cheaper alternatives. As a result, the other firms may choose to keep their prices stable to attract the price-sensitive consumers. Alternatively, if the firm lowers its price, the other firms may match or undercut the price to prevent losing market share.

The Kinked Demand Curve Model of Oligopoly Suggests That If