Final answer:
Firms that change prices less frequently due to menu cost theory are likely to be in less competitive industries, because these industries have less pressure for frequent price adjustments and may experience less rapid changes in supply and demand.
"The correct option is approximately option B"
Step-by-step explanation:
If the menu cost theory is true, then firms that change prices less frequently other than firms are likely to be in less competitive industries (Option B). This theory posits that there are costs associated with changing prices - resources must be used to analyze market conditions, update materials, and alter billing systems. Moreover, frequent price changes can lead to customer disapproval. In more competitive industries, firms are compelled to adjust prices more often to maintain market share and to respond to rivals’ pricing strategies, whereas in less competitive industries, there's less pressure on firms to do so and they can afford to keep prices stable for longer periods.
Furthermore, less competitive industries may also not see the rapid changes in supply and demand that would necessitate frequent price changes. Additionally, firms in industries with declining average total costs, possibly due to technological improvement or increased employee education, such as in high tech industries, may not need to change prices often as they experience economies of scale.