Kinked demand curve

Kinked demand curve,

Definition of Kinked demand curve:

  1. A bend in a standard demand curve that is a result of competitors decreasing their prices to match each others, but not raising them to achieve the same effect. The thought is that once a business has reduced their price to a certain level any fluctuation that raises the price will cause the firm to lose customers.

Meaning of Kinked demand curve & Kinked demand curve Definition