A kinked demand in an oligopoly occurs when:

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The kinked demand curve theory in oligopolies suggests that a firm may not change its price because an increase could lead to a loss of many customers if competitors do not follow suit, while a decrease might not gain enough customers if competitors also lower their prices. This results in a situation where total revenue declines whether the product's price is increased or decreased, assuming competitors' reactions are asymmetric.

A Kinked Demand in an Oligopoly Occurs When