Question

Fat's meats is in an oligopoly market. according to the kinked demand curve model, if it raises its prices to increase profit, its competitors will:

Answer 1

They will most likely not raise their prices.

If you look at the kinked demand curve, deviating from the market price will lead to losses for the firm. Increasing the price will lead to a loss in sales as price rigidity is a characteristic of an oligopolistic market, whereas if the firm lowers prices, this will invoke a price war and everyone will end up fighting for lower prices and customers.