What are the Positive and Negative aspect of Kinked demand curve model theory of oligopoly?
There are no positive and negative aspects. Kinked demand curve is a theory, not a fact. It explains very well why prices in oligopolistic industries tend to be stable and why price decreases by one oligopolist are usually matched by others, while price increases are usually not. It does not, however, explain how an industry becomes an oligopoly…
