The kinked demand curve is used to __________.

illustrate the difference between pure and differentiated oligopoly

No worries! We‘ve got your back. Try BYJU‘S free classes today!

explain the stability of oligopolistic prices

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

explain the prevalence of oligopoly in American industry

No worries! We‘ve got your back. Try BYJU‘S free classes today!

illustrate the linear programming problem faced by the firm

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B explain the stability of oligopolistic prices
The kinked demand curve is formulated to state the price fluctuations occuring in the oligopolistic market. It is explained with the help of two market demand curves. Hence, the kinked demand curve is used to explain the stability of oligopolistic prices.

Suggest Corrections