As a result of a kinked demand curve, the price:

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A kinked demand curve implies that there are different levels of price elasticity of demand above and below the existing price. Therefore, firms have reached a point where any change in price would result in a significant loss of market share. Thus, the firm would be inclined to keep the price stable at the kink point, and this is where the demand curve would be cut. Therefore, the price would settle down at the kink point.

As a Result of a Kinked Demand Curve, the Price