According to the Menu Cost Theory,firms Will Be Slow in Changing

question 5

Multiple Choice

According to the menu cost theory,firms will be slow in changing their prices because

• A)if prices changed frequently, individuals would reduce their demand for that good because of uncertainty.
• B)frequent price changes would be a sign of monopolistic behavior.
• C)the cost of changing the price might exceed the additional revenue the price change would generate.
• D)demand for their product would fall because consumers would purchase goods from firms that had not raised their prices.

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