The correct answer is: C. Inflexibility of price/price rigidity.
The kinked demand curve approach is a model of oligopoly that explains why prices in oligopolistic markets tend to be rigid. The model assumes that firms in an oligopolistic market have a kink in their demand curve at the current price. This means that if a firm raises its price, it will lose a lot of sales to its competitors, but if it lowers its price, it will not gain many additional sales. As a result, firms in an oligopolistic market are reluctant to change their prices, and prices tend to be rigid.
Price differentiation is a pricing strategy in which a firm charges different prices for the same product to different customers. This can be done based on factors such as customer location, customer volume, or customer type. Price differentiation can be used to increase a firm’s profits by charging higher prices to customers who are willing to pay more.
Flexibility of price is the ability of a firm to change its prices in response to changes in market conditions. A firm with a high degree of price flexibility can quickly change its prices to reflect changes in demand or costs. A firm with a low degree of price flexibility is more likely to keep its prices constant, even in the face of changes in market conditions.
Double price policy is a pricing strategy in which a firm charges two different prices for the same product. This can be done by offering a discount to customers who purchase a large quantity of the product or by offering a discount to customers who pay cash. Double price policy can be used to increase a firm’s profits by charging different prices to different customers.