Which of the Following Is NOT a Factor That Increases

question 104

Multiple Choice

Which of the following is NOT a factor that increases short-run price stickiness?

• A) Consumers tend to prefer stable prices
• B) Stable prices make it easier for consumers to plan their spending
• C) A firm can lower its price without fear that rival firms will also lower their prices
• D) Firms try to avoid price wars

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Definitions:

Price Elasticity

An assessment of the degree to which the demand or supply for a product varies following a price alteration.

Demand Curve

A graph showing the relationship between the price of a good and the amount of it that consumers are willing and able to purchase at various prices.

High-price Ranges

The upper levels of price points at which products or services are sold, often implying premium quality or exclusivity.

Perfectly Inelastic

Describes a situation in demand or supply where the quantity demanded or supplied does not change in response to a price change.