Firms Do Not Change Prices Frequently Because

question 118

Multiple Choice

Firms do not change prices frequently because:

• A)there are legal prohibitions against doing so.
• B)it is easier to change the quantity of capital used in production.
• C)it is costly to do so.
• D)customers will refuse to patronize firms that change prices frequently.

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Definitions:

Cash Flow

This represents the total amount of money being transferred in and out of a business, especially in terms of operational, investment, and financing activities.

Employees

Employees refer to individuals hired by an organization or company to perform specific duties in exchange for compensation.

Business Owner

An individual who owns and operates a business entity, assuming all risks and rewards of the venture.

Half-year Rule

A tax regulation allowing businesses to claim half-year depreciation for assets acquired or disposed of during a fiscal year.