Prices may be sticky in the short run because
A)firms are set in their ways of conducting business.
B)it's too costly for firms to change prices.
C)government regulated money prices.
D)there is no upward pressure on prices in the market.
E)consumers are irrational and do not react fast enough.

Question

Quizplus · Accepted Answer

Changing prices involves costs such as printing new menus, updating price tags, and reprogramming cash register software. These costs could outweigh the benefits if the change in price will only be temporary or if the demand for the product is not very responsive to changes in price. As a result, firms may choose to keep their prices sticky in the short run.

Prices May Be Sticky in the Short Run Because