The kinked demand curve explains pricing strategy in oligopolistic markets.

Name: The kinked demand curve explains pricing strategy in oligopolistic markets.
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The kinked demand curve model suggests that in oligopolistic markets, firms may not change their pricing strategies because the demand curve for their products is more elastic for price increases and less elastic for price decreases, leading to a kinked shape. This explains why prices tend to be stable in such markets despite few competitors.

The Kinked Demand Curve Explains Pricing Strategy in Oligopolistic Markets