Oligopoly Diagram Economics. Collusive oligopoly in economics with diagram article shared by nipun s. It is important to bear in mind there are different possible ways that firms in oligopoly can behave.
It is important to bear in mind there are different possible ways that firms in oligopoly can behave. When there is product differentiation i e differentiated oligop oly two or few sellers may recognise that their prices are closely interre lated. There are different diagrams that you can use to explain 0ligopoly markets.
The kinked demand curve model makes a prediction that a business might reach a stable profit maximising equilibrium at price p1 and output q1 and have little incentive to alter prices.
Kinked demand curve diagram. The kinked demand curve model makes a prediction that a business might reach a stable profit maximising equilibrium at price p1 and output q1 and have little incentive to alter prices. The demand curve faced by the leader firm of the oligopoly industry is determined for any price it is the horizontal distance between industry demand curve d t and the marginal cost curves of all small firms mc s. When there is product differentiation i e differentiated oligop oly two or few sellers may recognise that their prices are closely interre lated.
