11. Price StickinessThe degree of price stickiness in an economy plays an important role in determining the magnitude of the impact of shocks.Which of the following describes the firm behaviour that would cause the industry to have the stickiest prices?Firms tend to keep prices stable but often run sales where they lower prices by various amounts.A large number of firms buy and sell commodities in a centralized market.If one firm reduces its price, its competitors will likely retaliate by doing the same and therefore set off a 'price war'.The extent of price stickiness can also depend on the relevant time frame and the macroeconomic model that is being used.Which of the following describes the time frame that typically has the most flexible prices?The long-runThe short-runThe extreme short-run

Price stickiness refers to the sensitivity of the price to change due to the change in the market…

11. Price Stickiness The degree of price stickiness in an economy plays an important role in determining the magnitude of the impact of shocks. Which of the following describes the firm behaviour that would cause the industry to have the stickiest prices? Firms tend to keep prices stable but often run sales where they lower prices by various amounts. A large number of firms buy and sell commodities in a centralized market. O If one firm reduces its price, its competitors will likely retaliate by doing the same and therefore set off a 'price war'. The extent of price stickiness can also depend on the relevant time frame and the macroeconomic model that is being used. Which of the following describes the time frame that typically has the most flexible prices? The long-run The short-run O The extreme short-run

11. Price Stickiness The degree of price stickiness in an economy plays an important role in determining the magnitude of the impact of shocks. Which of the following describes the firm behaviour that would cause the industry to have the stickiest prices? Firms tend to keep prices stable but often run sales where they lower prices by various amounts. A large number of firms buy and sell commodities in a centralized market. O If one firm reduces its price, its competitors will likely retaliate by doing the same and therefore set off a 'price war'. The extent of price stickiness can also depend on the relevant time frame and the macroeconomic model that is being used. Which of the following describes the time frame that typically has the most flexible prices? The long-run The short-run O The extreme short-run

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter33: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 5PA

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