Costs That Deter Firms from Changing Prices in Response to Demand

question 73

Multiple Choice

Costs that deter firms from changing prices in response to demand changes are known as

• A) sticky costs.
• B) menu costs.
• C) transaction costs.
• D) implicit costs.

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Definitions:

Parol Evidence Rule

A legal principle that prevents parties from presenting extrinsic evidence that contradicts or adds to the terms of a written contract.

Merger Clause

A provision in a contract stating that the written agreement supersedes all prior or oral agreements, focusing on the primacy of the current document.

Parol Evidence Rule

A legal principle that prevents parties in a written contract dispute from introducing oral or extrinsic evidence to modify the original agreement.

Parol Evidence Rule

A rule in contract law that prevents parties from presenting evidence of prior or contemporaneous agreements that would contradict the terms of a written contract.