Question

What would be nature of firm's demand curve under oligopoly market

Answer 1

there is no single theory of oligopoly. The two that are most frequently discussed, however, are the kinked‐demand theory and the cartel theory. The kinked‐demand theory is illustrated in Figure and applies to oligopolistic markets where each firm sells a differentiated product. According to the kinked‐demand theory, each firm will face two market demand curves for its product. At highprices, the firm faces the relatively elasticmarket demand curve, labeled MD 1 in Figure .