(5) Uncertainty of Demand Curve: Demand curve is uncertain under oligopoly. Demand curve is perfectly elastic under perfect competition. It means a firm can sell as much of the commodity at the prevailing price as it desires. Selling more or less of the commodity will have no effect on the demand curve. Demand curve of the firm is certain, Demand curve of a monopolist is also certain because he has no competiton. In case of monopolistic competition also a firm's demand curveis certain. However, démand curve of a firm operating under oligopoly is uncertain, itis so because the changes effected by tin price are very much influenced by similar changes made by other firms. It cannot therefore be said with any amount of certainty, that with fall in price demand must increase and with rise in Price demand must decrease. Under cligopoly, the firms face Kinked demand curve; as shown in Fig. 1, Such a demand curve has two segments, DDi demand curve has a kink at point , Demand curve isalso known as average revenue (AR) curve. Upper segment of AR curve from point ‘K’ is more clastic, It implies that when one firm raises its price, the other firms keep their prices unchanged. Thus, when one firm alone will effect change in price, then there will be considerable change in its sales. Lower segment of AR curve from point K, ie,, KD; represents less elastic demand. Itimplies that when one firm reduces its price then all other firms in the market also reduce their prices. When all firms reduce prices, then there will be no increase in the sale of any one firm, rather all firms may find a very small increase in their sale. Both these segments of average revenue curve forma kink at point K. When average revenue curve is kinked then its corresponding marginal revenue curve is DPRM, It is shown in Fig. 1, that because of kinked average revenue curve, its corresponding marginal revenue curve becomes discon- tinuous at ’ level of production or at the level of kink. PR portion of marginal revenue curve which is below point ‘K’ shows discontinuity. DP portion of marginal revenue curve which is below the more elastic portion DK of the average revenue curve, is positive. It proves that if a firm lowers its price, its total revenue will increase. On the contrary, RM portion of marginal revenue curve which is below the inelastic portion KD; of the average revenue curve, is negative. It means thatifa firm lowersiits price, its total revenue will not increase. PR gap in the marginal revenue curve arises because average revenue curve has suddenly changed from more elastic to inelastic curve.