You might also find discussions on monopoly, a simpler case of extra-normal profit, helpful. Here’s one:
If we were to discuss all the members of this oligopoly, they would each have a separate, though similar, diagram. The prices at the kink would all be the same, but the quantities at the kink might be different.
Even in competition, oligopolists can make extra-normal profits. Firms in oligopolistic competition tend to be locked in to price, so they must find other ways to compete, and maintain or gain market share. (We make the casual observation that one need look no further than oligopoly pricing (and as we shall see, oligopsony pricing) to deduce a cause for Keynesian ‘price stickiness.’ In an economy rife with oligopoly we would expect many points of price, and quantity, fixedness, making deflation a uneven and problematic process.) The owner of a service station, for instance, locked in competition with 3 other service stations at an intersection, might, to attract more customers, initiate full service, or add a convenience store or coffee shop. He might do this, raising his costs, until the marginal cost curve was something like MC3 in Diagram 3. The oligopolist would not want to raise costs any more, because then his profit maximization would occur at a price higher than pa, and he would lose market share.
In the real economy, this would be manifest as higher corporate profits, and, since most corporate stock is held by the wealthy, an increase in income of the wealthy. Corresponding to this, we would expect a decrease in the welfare of the rest of the economy, as the increase in income of the wealthy has to come from somewhere.