Economics A-Level
Price rigidity
What Price rigidity means in Economics A-Level, as defined for AQA.
Definitions of Price rigidity
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Reference: AQA
A situation in non-collusive markets, explained by the kinked demand curve model, where undercutting rivals triggers price wars while raising prices leads to lost market share.
The stability of prices that the kinked demand curve model illustrates, explained by the discontinuous marginal revenue curve.
When prices in oligopolistic markets tend to remain stable, often illustrated using the kinked demand curve model.
Topics that use Price rigidity
- Oligopoly (AQA A-Level)
Related terms
- Barriers to entry
- Cartel
- Cartels
- Collusion
- Concentration ratio
- Concentration ratios
- Cooperation
- Dynamic efficiency
Using Price rigidity in the exam
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