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Question

Kinked demand curve is related to _______.

A
monopoly
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B
pure competition
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C
oligopoly
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D
none of these
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Solution

The correct option is C oligopoly
Oligopoly is a type of market where there are small number of big firms influence the market price and demand of the commodity. Under this type of market, the demand curve is indeterminate which is known as kinked shaped demand curve due to high interdependence of firms on to each other because of which the decision of each firm keeps changing continuously.

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