Oligopoly. Under such markets, the price is supposed to be rigid. The reason is that here the firms are interdependent. The actions of every firm will be determined by the actions and reactions of every other rm. If one firm increases the price none other follows. The customers of that firm may switch to other rms. The firm which increased the price may feel a fall in revenue and profit.
On the other hand, if one firm reduces the price everyone else will follow. All firm’s revenue and profit fall. So firms under oligopoly will always try to keep their price rigid.
