In contrast to American firms, Japanese firms frequently make lifetime employment commitments to their workers and agree not to lay them off when product demand is weak. Other things being equal, we would expect Japanese firms to:
A. face more elastic product demand curves than American firms.
B. have relatively greater variable costs than American firms.
C. discontinue production at higher product prices than would American firms.
D. continue to produce in the short run at lower prices than would American firms.
Answer: D
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