n the presence of shortages, why would a firm, such as a restaurant with people waiting for a table or a theater with people waiting for a ticket, not raise prices when doing so would seem to increase profits? A. Increasing prices might result in short run gains at the expense of long run profits. B. Increasing prices might be seen as unfair. C. Increasing prices requires the firm to pay substantial "switching costs." D. Both a and b. E. All of the above.
n the presence of shortages, why would a firm, such as a restaurant with people waiting for a table or a theater with people waiting for a ticket, not raise prices when doing so would seem to increase profits? A. Increasing prices might result in short run gains at the expense of long run profits. B. Increasing prices might be seen as unfair. C. Increasing prices requires the firm to pay substantial "switching costs." D. Both a and b. E. All of the above.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter1: Ten Principles Of Economics
Section: Chapter Questions
Problem 3CQQ
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Concept: Does Fairness Matter 1
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In the presence of shortages, why would a firm, such as a restaurant with people waiting for a table or a theater with people waiting for a ticket, not raise prices when doing so would seem to increase profits?
Increasing prices might result in short run gains at the expense of long run profits.
Increasing prices might be seen as unfair.
Increasing prices requires the firm to pay substantial "switching costs."
Both a and b.
All of the above.
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