Why the demand curve in an oligopoly is kinked?

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1051870

2026-04-15 14:15

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because oligopolistic firms are unlikely to benefit from a reduction in prices, it is something known as game theory, each firm is attempting to get the edge over their competitor, but not with prices. This is because if one firm reduces their prices, it is highly likely that the others will do the same and in the end all parties finish with the same market share as when the price war erupted; but because they reduced prices, profit is lost, with no benefit for the firm

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