Shape of demand curve in oligopoly is

Horizontal Vertical Upward sloping form left to right Indeterminate

Indeterminate

Indeterminate Demand Curve implies that the demand curve is unknown under oligopoly due to different behavior patterns of organizations. There is high degree of interdependence of firms in oligopoly. A decrease in price by one firm may lead to a price war. An increase in price may or may not lead to a reaction by competitors. Accordingly, it becomes very difficult to estimate change in firm's sales caused by a change in price. This means that a precise relationship between price and sales cannot be established. So demand curve is indeterminate. It was suggested by an economist Paul Sweezy that, in oligopoly, the demand curve is kinked. The firm faces a demand curve with a kink at the prevailing price level. The curve is more elastic above the kink and less elastic below it. This means that the response to a price increase is less than the response to a price decrease.