Evidence suggests that prices tend to be sticky in the short run. Which of the following reasons/explanations for the sticky prices is incorrect? a. Costs of price adjustment. b. Firms hold back on price changes, waiting for others to go first. c. Prices are fixed by explicit contracts. d. Firms tacitly agree to stabilize prices, perhaps out of fairness to customers. e. None of the above are incorrect.

Evidence suggests that prices tend to be sticky in the short run. Which of the following reasons/explanations for the sticky prices is incorrect? a. Costs of price adjustment. b. Firms hold back on price changes, waiting for others to go first. c. Prices are fixed by explicit contracts. d. Firms tacitly agree to stabilize prices, perhaps out of fairness to customers. e. None of the above are incorrect.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter3: Market Demand And Supply

Section: Chapter Questions

Problem 3SQP

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Evidence suggests that prices tend to be sticky in the short run. Which of the following reasons/explanations for the sticky prices is incorrect?

a. Costs of price adjustment.

b. Firms hold back on price changes, waiting for others to go first.

c. Prices are fixed by explicit contracts.

d. Firms tacitly agree to stabilize prices, perhaps out of fairness to customers.

e. None of the above are incorrect.

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