If an oligopolist's competitors follow its price cuts but ignore its price increases,the oligopolist will face a gap in its marginal revenue schedule.

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If an oligopolist reduces the price of its product, it can force its competitors to reduce their prices as well. However, if the oligopolist increases the price, its competitors may choose not to follow suit, resulting in a gap in the oligopolist's marginal revenue schedule. This is known as the kinked demand curve model, which is a theoretical framework used to explain price and output decisions in oligopoly markets.

If an Oligopolist's Competitors Follow Its Price Cuts but Ignore