All the Following Explain Price Stickiness Except

question 12

Multiple Choice

All the following explain price stickiness except

• A) firms choose not to adjust prices until they can assess if changes in sales are temporary or permanent.
• B) the more firms produce, the lower the average cost of production. Therefore, firms are willing to not raise prices as long as they can sell more.
• C) firms may be concerned that consumers may be angered by price increases.
• D) firms may be concerned that their rivals may not match their price increases.

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Definitions:

Inventory

The raw materials, work-in-progress products, and finished goods considered to be the portion of a business's assets that are ready or will be ready for sale.

Revenue

The sum of money received from selling goods or providing services that are fundamental to a company's main business activities.

Indirect Effects

Consequences of an action that are not immediately apparent or directly linked to the action but occur as a secondary effect.

Accounting Principle

Fundamental guidelines or rules that govern how financial transactions and events are recorded and reported in financial statements.