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11 March, 23:07

Briefly discuss the shortcomings of the kinked demand curve model of the oligopoly market structure

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  1. 12 March, 02:45
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    Kinked demand curve model only explains why a certain price has to be determined. It does not shows how the price was determined. Another disadvantage of this model is that this theory cannot be applied to all oligopoly market. It cannot be applied to cases of price cartels which is a major part of the said market. Finally, it was proven that this type of model only applies in periods of depression because these are the times when prices most likely are stable whereas during inflation, prices increase rather than staying in the same level.
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