Oligopoly Diagram Explained. In the figure above kpd is the is the kinked demand curve and op 0 is the prevailing price in the oligopoly market for the or product of one seller. Kinked demand curve diagram.
Actually cournot illustrated his model with the example of two firms. And to explain the price rigidity in this market conventional demand curve is not used. For example in fig.
Is there a stable profit maximising equilibrium in this model.
While individually powerful each of these firms also cannot prevent other competing firms from holding sway over the market. For example in fig. The model does not explain how these prices have been determined. But there is a good chance that the price of the product of a firm would be consistent with its goal of profit maximisation.
