Which of the following is NOT a factor that increases short-run price stickiness?
A.
Consumers tend to prefer stable prices
B.
Stable prices make it easier for consumers to plan their spending
C.
A firm can lower its price without fear that rival firms will also lower their prices
D.
Firms try to avoid price wars
C.
A firm can lower its price without fear that rival firms will also lower their prices
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Accounting costs
A) are historical costs. B) are replacements costs. C) usually include implicit costs. D) usually include normal profits.
Which of the following statements best characterizes a basic difference between market economies and centrally planned economies?
a. Society relies more upon prices to allocate resources when the economy is centrally-planned than when it is market-based. b. The self-interest of households is reflected more fully in the outcome of a centrally-planned economy than in the outcome of a market economy. c. Government plays a larger role in the economic affairs of a market economy than in the economic affairs of a centrally planned economy. d. None of the above are correct.