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Non-Competitive Markets — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsNon-Competitive Markets3 Marks
Question
What is meant by price rigidity, under oligopoly?
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Answer

  1. Price rigidity refers to a situation in which whether there is change in demand and supply the price tends to stay fixed.
  2. If a firm tries to reduce the price the rivals will also react by reducing their prices. Likewise, if it tries to raise the price, other firms will not do so. It will lead to loss of customers for the firm which intended to raise the price.

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