An oligopolist faces a kinked demand curve. In your own words, describe why firms face this situation. $600 (5,000, $550) (10,000, $500) $500 $400 (11,000, $300) $300 $200 $100 5,000 10,000 15,000...

An oligopolist faces a kinked demand curve.  In your own words, describe why firms face this situation.


Theory says that oligopolies should stick to the $500.00 price to maximize revenue (see the graph above).

Use the graph pictured to calculate elasticity and total revenue in the elastic, inelastic, and unit elastic portions of the demand curve at the price and quantity points specified to explain the theory.

Extracted text: An oligopolist faces a kinked demand curve. In your own words, describe why firms face this situation. $600 (5,000, $550) (10,000, $500) $500 $400 (11,000, $300) $300 $200 $100 5,000 10,000 15,000 20,000 Quantity Theory says that oligopolies should stick to the $500.00 price to maximize revenue (see the graph above). Use the graph pictured to calculate elasticity and total revenue in the elastic, inelastic, and unit elastic portions of the demand curve at the price and quantity points specified to explain the theory. | Price ($)