Menu Costs ________

question 14

Multiple Choice

Menu costs ________.

• A)are the cost a firm bears when it changes its prices
• B)are one source of price stickiness because changing prices involves many hidden costs
• C)are one source of price stickiness because firms may not want to change their "menus" too often and risk alienating customers
• D)all of the above
• E)none of the above

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Definitions:

Corporate Bond

A debt security issued by a corporation to raise funding, promising to pay back the principal amount along with interest.

Marginal Tax Rate

The marginal tax rate is the rate at which your last dollar of income is taxed, essentially the rate applied to your next dollar of taxable income.

Corporate Bond

A debt security issued by corporations to raise capital, promising to pay back the face value in addition to interest.

Municipal Bond

A debt security issued by a city, municipality, or county to finance its capital expenditures, often offering tax-free interest payments to investors.