If one firm raises its price in an industry characterised by firms' facing kinked demand curves, it is likely that other firms in the industry will

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In an industry characterised by kinked demand curves, other firms are unlikely to change their prices in response to a single firm's price increase. This is because the kinked demand curve implies that demand is elastic above the prevailing price and inelastic below it. Therefore, a price increase may result in a significant decrease in demand for the firm that raised its price, while a price decrease may not result in a significant increase in demand for the other firms. As a result, the other firms are likely to maintain their prices and market shares.

If One Firm Raises Its Price in an Industry Characterised