Refer to Figure 12.5.1 above. Price rigidity in this figure is described by:

A) the flat portion of the demand curve.
B) the steep portion of the demand curve.
C) the increase n marginal cost, without a corresponding increase in price.
D) the smaller increases in price along the flatter portion of the demand curve.

Price Rigidity

Characteristic of oligopolistic markets by which firms are reluctant to change prices even if costs or demands change.

Demand Curve

Depicts how the quantity demanded of a commodity varies with its price, commonly shown as a downward-sloping line on a graph, reflecting the inverse relationship between price and quantity demanded.