In the context of oligopoly the kinked demand curve hypothesis is designed to explain ........

Economics- Phase (I & II) Demand and Supply , Market Structures

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In the context of oligopoly, the kinked demand curve hypothesis is designed to explain

Price and output determination

Price rigidity

Price leadership

Collusion among rivals

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Explanation:

In the context of oligopoly, the kinked demand curve hypothesis is designed to explain Price rigidity. The curve is more elastic above the kink and less elastic below it. This means that the response to a price increase is less than the response to a price decrease.

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