The Kinked Demand Model in Oligopoly

The video explains the kinked demand model in oligopoly, highlighting its basis in game theory and interdependence among firms. It discusses scenarios of price increases and decreases, illustrating how firms react and the resulting demand elasticity. The video also covers the marginal revenue curve, profit maximization, and price stability, while addressing the model's limitations and assumptions.

What is the significance of the marginal revenue curve in the kinked demand model?

How does the kinked demand model explain price stability in oligopolies?

What are some limitations of the kinked demand model?

In what ways can firms in an oligopoly engage in price leadership?