Explain how an Oligopolistic firm maximizes profit in short run

Explain how an Oligopolistic firm maximizes profit in short run

The oligopolist maximizes profits where MC = MR, which results in an equilibrium output of Q units and an equilibrium price of P. The oligopolist faces a kinked‐demand curve because of competition from other oligopolists in the market. MC and ATC curve pass through the gap between MR curves; C is unit cost.

Abnormal profit is represented by area ABPC.

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