The reasons why changing prices or wages may be costly include each of the following except
A) the possibility that people attempt to stabilize their commercial relationships by signing long-term contracts.
B) the possibility that people attempt to stabilize their nonmarket relationships by signing long-term contracts.
C) the possibility that customers find frequent price changes annoying.
D) the possibility that other firms are not changing their prices.

Question

Quizplus · Accepted Answer

The reasons why changing prices or wages may be costly typically relate to commercial activities and market dynamics, such as long-term contracts with suppliers or employees (A), customer dissatisfaction with frequent price changes (C), and competitive strategies in response to price stability among other firms (D). Nonmarket relationships (B), which are not based on commercial transactions or economic activities, are less relevant to the discussion of costs associated with changing prices or wages.

The Reasons Why Changing Prices or Wages May Be Costly