A prediction from the kinked demand curve model of oligopoly is that, for an individual firm, small changes in

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The kinked demand curve model of oligopoly suggests that small changes in marginal cost will not lead to changes in price or output due to the asymmetric elasticity of demand above and below the current price. Firms are reluctant to change prices because an increase might not be followed by competitors (leading to a loss of market share), while a decrease might be matched by competitors (leading to a price war without gaining market share).

A Prediction from the Kinked Demand Curve Model of Oligopoly