An Analysis of the Validity of Kinked Demand Curve on Granite Industries at Chennai

Abstract

he world we have described is clearly different from the world implied Oligopoly. A large number of small firms that produce a homogeneous product characterize a perfectly competitive market. As a result, each firm is a price taker and in the long run economic profit it equal to zero. This cannot happen in reality. Therefore, we come across the situation of less than pure competition or imperfect competition. Among these various types of such imperfect competitive markets, some types are very common in the practical world namely, monopoly, monopolistic competition and oligopoly competitive markets. These markets are representing the actual market situation. Therefore the conclusion which are followed from the theories of imperfect competition particularly the above three market a are found to be applicable to the real world.