Multiple Choice
Which of the following best explains why prices tend to be inflexible even when demand changes?
A) Government regulations limit the number of times a firm can change prices in a year.
B) In most industries the profit-maximizing price does not change even when demand changes.
C) Production costs do not tend to change when a firm varies its level of output.
D) Firms may be reluctant to change prices for fear of setting off a price war or losing customers to rivals.
Correct Answer:
Verified
Correct Answer:
Verified
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