A "menu cost" is the cost associated with:
A) changing price lists when there is inflation.
B) buying new shoes.
C) designing a new menu for a restaurant.
D) trying to reduce holdings of cash.

Question

Quizplus · Accepted Answer

Menu cost refers to the cost incurred by a firm or an organization to change its prices. When there is inflation, the firm has to adjust its price lists to stay competitive in the market. This adjustment involves printing new price lists, updating the website, informing customers, and adjusting accounting systems. These activities involve tangible and intangible costs, which are collectively known as menu costs. Thus, changing price lists when there is inflation is the correct answer to this question.

A "Menu Cost" Is the Cost Associated With