When L.L. Bean decides to increase its prices due to general inflation, they must reprint the millions of catalogs they produce and distribute. The costs associated with doing so in response to inflation are called:
A) menu costs.
B) shoe-leather costs.
C) tax distortions.
D) printing costs.

Question

Quizplus · Accepted Answer

The costs associated with reprinting catalogs in response to inflation are examples of menu costs, which refer to the costs incurred by firms when they change their prices. These costs include the costs of updating price lists, changing labels or packaging, and reprinting catalogs or other marketing materials.

When LL Bean Decides to Increase Its Prices Due to General