Menu costs of inflation
A) literally mean that restaurants are the most affected by inflation because they are constantly printing new menus.
B) are best described as the costs firms incur by having to change prices either on paper or in the computer.
C) are the costs one incurs when shopping for lower prices.
D) are the costs involved with only those goods whose prices are rising faster than inflation; this basket of goods represents the "menu."
E) mean that because we can choose what goods we consume,we have a menu of inflation from which to choose and we can "opt out" by consuming a different "basket" of consumer goods.

Question

Quizplus · Accepted Answer

Menu costs of inflation refer to the costs incurred by firms when they have to change their prices, either by printing new menus or updating their computer systems. This can include the cost of labor, materials, and other resources needed to make these changes, as well as the potential loss of customers due to confusion or dissatisfaction with the new prices. It is not related to shopping for lower prices or the goods affected by inflation.

Menu Costs of Inflation