Most economists believe that prices are:
A) flexible in the short run but many are sticky in the long run.
B) flexible in the long run but many are sticky in the short run.
C) sticky in both the short and long runs.
D) flexible in both the short and long runs.

Question

Quizplus · Accepted Answer

Most economists believe that in the short run, prices are sticky because businesses may have contracts with fixed prices and may also want to avoid upsetting their customers. However, in the long run, prices are more flexible as businesses can adjust their prices to reflect changes in supply and demand.

Most Economists Believe That Prices Are