Which of the following is not a factor that increases short-run price stickiness?
A)Consumers tend to prefer stable prices.
B)Stable prices make it easier for consumers to plan their spending.
C)A firm can lower its price without fear that rival firms will also lower their prices.
D)Firms try to avoid price wars.

Question

Quizplus · Accepted Answer

In the short run, firms are often hesitant to change prices due to the fear of triggering a price war, which is why option C is not a factor that increases price stickiness. Instead, it suggests a situation where a firm can change prices without competitive repercussions, which would decrease price stickiness.

Which of the Following Is Not a Factor That Increases