Menu costs of inflation:
A) literally mean that restaurants are the most affected by inflation because they are constantly printing new menus.
B) are best described as the costs firms incur by having to change prices either on paper or in the computer.
C) are the costs one incurs when shopping for lower prices.
D) are the costs involved with only those goods whose prices are rising faster than inflation; this basket of goods represents the "menu."
E) mean that because we can choose what goods we consume, we have a menu of inflation to choose from and we can "opt out" by consuming a different "basket" of consumer goods.

Question

Quizplus · Accepted Answer

Menu costs refer to the costs incurred by businesses when they have to change their prices due to inflation. This can involve the printing of new menus or updating pricing systems, both of which incur costs for the business.

Menu Costs of Inflation