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Unformatted text preview: demand curve ED 1 together make up the Kinked Demand Curve. Under the above stated assumptions the lower portion of the flatter demand curve ED and the upper portion of the steeper demand curve D 1 E are not operative. Taking into account only relevant segments of the two demand curves a Kinked demand curve DED 1 has been formed and presented in Figure 45. Once we locate the point of Kink there is no further problem in oligopoly analysis. The point of Kink, E, is itself an equilibrium point. At such a point equilibrium output produced is Q and price charged is P....
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- Fall '10
- Supply And Demand, Kinked demand