When Firms Are Subject to Calvo Pricing

question 33

Multiple Choice

When firms are subject to Calvo pricing

• A)they can never change their prices.
• B)they change their prices every other year.
• C)they price their output at the Calvo lower bound.
• D)they can change their prices at will.
• E)when they change their prices is determined at random.

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Definitions:

Lettuce Crop

The cultivation and production of lettuce, a leafy green vegetable commonly used in salads and other dishes.

Economy Moves

The various shifts and changes in the economic activities and conditions within an economy over time.

Supply

The total amount of a specific good or service that is available to consumers at a particular price over a given period.

Equilibrium Price

The price at which the quantity of a good supplied equals the quantity of the good demanded.