When the price level rises more than expected,a firm with a sticky price will sell its output at a price that is
A)less than it desires and increase its production.
B)less than it desires and decrease its production.
C)more than it desires and increase its production.
D)less than it desires and decrease its production

Question

Quizplus · Accepted Answer

When the price level rises more than expected, a firm with a sticky price will find its prices lower than the market level, leading to increased demand for its products. To meet this demand, the firm will increase its production.

When the Price Level Rises More Than Expected,a Firm with a Sticky