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  Oligopoly and its Characteristics, Kinked Demand Curve

Oligopoly and its Characteristics are stated below

• Only few firms in the market.

• Sell either homogeneous products or differentiated products.

• Barriers of entry exist.

• Mutual interdependence in decision making.

• Non-price Competition exists.

Kinked Demand Curve is described below

  • The demand curve for an oligopolist has two segments with the upper segment being more elastic than the lower segment as shown below.

574_kindle demand curve.png

  • MR follows the shape of AR curve.

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