The Costs Incurred by Merchants in Having to Change Product

question 31

Multiple Choice

The costs incurred by merchants in having to change product prices (such as the costs of reentering prices into computer systems) are referred to as which of the following?

• A) subscription costs
• B) fixed costs
• C) menu costs
• D) variable costs

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Definitions:

Cross-Price Elasticity

A measurement of how the quantity demanded of one good responds to a change in the price of another good.

Negative

A term often indicating a subtraction, a deficit, or an unfavorable outcome in various contexts.

Unrelated Goods

denotes two or more goods that have no direct connection in consumption or production, implying no cross-price elasticity between them.

Complementary Goods

Products or services that are consumed together because the use of one enhances the use of the other.