Downward price rigidity

...Oligopoly affects income distribution because oligopolistic companies use their monopoly power to raise prices, disrupt efficient resource allocation, and obtain monopoly profits from consumers. On the other hand, in oligopoly industries, prices and the market share of each company become rigid, or the downward flexibility of prices is lost (= downward price rigidity), which impairs the functioning of the price mechanism in the economy as a whole, and is considered to be one of the causes of the macro-pathologies of modern economies, such as unemployment, business cycles, and inflation. However, the extent to which efficiency of resource allocation and neutrality of income distribution are lost and price rigidity occurs in oligopoly markets depends on many factors, such as the nature of the goods traded in the market, the characteristics of the production technology, and the history and experience of the industry.

*Some of the terminology used to refer to "downward price rigidity" is listed below.

Source | Heibonsha World Encyclopedia 2nd Edition | Information

…寡占は，一つには寡占企業がその独占力を使って，価格をつり上げ効率的な資源配分を乱すとともに，消費者から独占的な利潤を得ることによって所得分配に影響を与える。一方，寡占産業では価格や各企業のマーケット･シェアが硬直化し，あるいは価格の下方伸縮性が失われる(＝価格の下方硬直性)ことによって，経済全体での価格メカニズムの働きが阻害されるため，失業，景気循環，インフレーション等，現代経済のマクロ的諸病理の原因の一つであるとされる。しかし，寡占市場で，どの程度資源配分の効率性や所得分配の中立性が失われ，また価格の硬直化が発生するかは，その市場で取引される財の性質，生産技術の性格，その産業の歴史，経験等，多くの要因に依存する。…

※「価格の下方硬直性」について言及している用語解説の一部を掲載しています。

出典｜株式会社平凡社世界大百科事典 第２版について | 情報