Economic Definition of kinked-demand curve. Defined.
Offline Version: PDF
Term kinked-demand curve Definition: A demand curve with two distinct segments with different elasticities that join to form a kink. The primary use of the kinked-demand curve is to explain price rigidity in oligopoly. The two segments are: (1) a relatively more elastic segment for price increases and (2) a relatively less elastic segment for price decreases. The relative elasticities of these two segments is directly based on the interdependent decision-making of oligopolistic firms.
« killer application | kinked-demand curve analysis »
Permalink: https://glossary.econguru.com/economic-term/kinked-demand+curve