Price rigidity is the feature of

Options

A. (a)Perfect competitive competition
B. (b)Monopoly
C. (c)Oligopoly
D. (d)Monopolistic competition

Answer

C

Explanation

Under oligopoly there is the existence price rigidity. Prices lend to be rigld and sticky. If any firm makes a price-cut it is immediately retaliated by the rival firms by the same practice of price-cut. There occurs a price-war in the oligopolistic condition. Hence under oligopoly no firm resorts to price- cut without making price output decision with other rival firms.