In the very short run, firms tend to respond to demand shocks by changing their prices.

Name: In the very short run, firms tend to respond to demand shocks by changing their prices.
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In the very short run, firms are more likely to respond to demand shocks by adjusting output or inventory levels rather than changing prices, as prices are often sticky due to menu costs and other frictions.

In the Very Short Run, Firms Tend to Respond to Demand