Plzzz ans the ques
Dear Student
The demand curve faced by an oligopoly firm is presented below. It is known as kinked-demand curve, as it has a kink or a bend at point 'K'. The upper part of the demand curve i.e. DK is more elastic compared to the lower part KE.
The upper part DK being more elastic represents that if the firm raises its price above OP1, then it will lose all its customers because the rival firms won't raise their price.
The lower part KE being more inelastic represents that if the firm lowers its price below OP1, then all the rival firms will follow the same pursue, else they will lose all their customers to the firm (which has reduced its price initially).
Regards