<p>As the graph notes, the red segment of the demand curve is <strong><em>relatively</em> inelastic</strong>, meaning that compared to the blue segment, the red segment of demand is relatively insensitive to price changes. This does not mean that price elasticity anywhere on the red segment is less than 1 (which implies inelasticity in the <em>absolute</em> sense). </p>

CC BY-SA 3.0
2017-03-27T00:19:14.497Z
2017-03-27T00:19:14.497Z
Herr K.
<p><a href="https://i.sstatic.net/8j1un.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/8j1un.png" alt="Kinked Demand Curve"></a></p>

<p>Hello, so in class I learned about the kinked demand curve in oligopoly. Our teacher said that under the sticky price, the demand is inelastic. However, I don't understand how the demand can be inelastic when the marginal revenue is still positive. </p>

<elasticity><oligopoly>
Oligopoly kinked demand graph doesn't make a sense to me
Jims Choe
# Oligopoly kinked demand graph doesn't make a sense to me

(Asked by: username_0 on 2017-03-26)

[![Kinked Demand Curve](https://i.sstatic.net/8j1un.png)](https://i.sstatic.net/8j1un.png)

Hello, so in class I learned about the kinked demand curve in oligopoly. Our teacher said that under the sticky price, the demand is inelastic. However, I don't understand how the demand can be inelastic when the marginal revenue is still positive.

**Tags:** elasticity, oligopoly

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## 1 answers

### Answer by username_1 on 2017-03-27. Score: 3

As the graph notes, the red segment of the demand curve is ***relatively* inelastic**, meaning that compared to the blue segment, the red segment of demand is relatively insensitive to price changes. This does not mean that price elasticity anywhere on the red segment is less than 1 (which implies inelasticity in the *absolute* sense).


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