The kinked demand curve is an explanation of sticky prices.

Name: The kinked demand curve is an explanation of sticky prices.
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The kinked demand curve model suggests that firms face a demand curve that is relatively elastic for price increases and relatively inelastic for price decreases, resulting in a "sticky" price point at the kink. This can explain why firms may be hesitant to change their prices frequently or aggressively in response to market conditions.

The Kinked Demand Curve Is an Explanation of Sticky Prices