Which of the following is an explanation for why prices may be sticky in the short run?
A) menu costs
B) price expectations
C) a vertical long-run aggregate supply curve
D) money illusion

Question

Quizplus · Accepted Answer

Menu costs refer to the expenses that firms incur when changing the prices of their goods and services, such as the printing costs of new menus, advertising costs to promote new prices, and the time and labor required to update computer systems. These costs can make firms hesitant to adjust their prices frequently or quickly, leading to sticky prices in the short run.

Which of the Following Is an Explanation for Why Prices