If prices are sticky:
A)the market quickly sticks at equilibrium.
B)the market clears quickly.
C)the market only slowly moves toward equilibrium.
D)all of the above.

Question

Quizplus · Accepted Answer

When prices are sticky, it means that they do not adjust quickly to changes in supply and demand. This results in the market only slowly moving towards equilibrium as the market clearing condition (where supply equals demand) is not reached quickly due to the stickiness of prices. Therefore, options A and B are incorrect as they imply that the market adjusts quickly.

If Prices Are Sticky