You Own a Store and Have Not Raised Prices Recently-And

question 75

Multiple Choice

You own a store and have not raised prices recently-and now your store has more customers.Which statement is correct?

• A) This can be troublesome because you face a "menu costs" problem because you must not have increased prices fast enough.
• B) This can be troublesome because you face a price confusion problem: You don't know if the extra business means that you should open another store, or if the crowds are a result of inflation, which has caused all consumers to buy at a faster rate.
• C) This can be troublesome because you face a future price uncertainty problem because you don't know how much to increase your prices now or in the future.
• D) It can't be troublesome; it can only be good.
• E) This can be troublesome because too many customers generate deflationary pressures for all businesses.

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Definitions:

Movement

A change or development in a particular direction, often referred to in contexts ranging from physical relocation to shifts in opinions or trends.

Supply Curve

represents the relationship between the price of a good and the quantity of that good suppliers are willing to produce and sell, typically upward sloping because higher prices incentivize more production.

Shift

A change in demand or supply where the entire curve moves either right (increase) or left (decrease), signifying changes in market conditions.

Supply Curve

A visual chart demonstrating the link between a product's price and the amount producers are willing to supply.