Some Firms Do Not Instantly Adjust the Prices They Charge

question 102

Multiple Choice

Some firms do not instantly adjust the prices they charge in response to changes in demand for all of the following reasons except:

• A) it is costly to alter prices.
• B) they do not want to annoy their frequent customers.
• C) prices do not adjust when there is perfect competition.
• D) some prices are set by long-term contracts between firms and customers.

---

Definitions:

Social Proof

A tendency to conform to what we believe respected others think and do.

Lowball

A sales technique where an item or service is initially offered at a lower price than is actually intended to be charged, after which the price is raised to increase profits.

Disney Vault

A term referring to the practice by The Walt Disney Company of putting its films into moratorium, making them unavailable for purchase for a specified period.

Scarcity

A condition of limited resources available, making them more valuable or desirable.