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babunello [35]
3 years ago
5

The sticky-price theory of the short-run aggregate supply curve says that if the price level rises by 5% while firms were expect

ing it to rise by 2%, then some firms with high menu costs will have:________.
Business
1 answer:
Ne4ueva [31]3 years ago
4 0

Answer:

<u>to keep their prices the same</u>

Explanation:

Remember, having a higher Menu cost implies that such a firm would suffer more if it adjusted its prices.

So the sticky-price theory makes the assumption that a firm that notices an increase in the prices of their products would <em>keep their prices low</em> out of fear that doing so would result in losses for the firm if demand changes negatively.

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2 years ago
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2 years ago
Suppose for a given consumer the marginal utility (MU) of a pizza is 100 utils and the MU of a hamburger is 80 utils, and that t
NemiM [27]

Answer:

<u>is not</u> , <u>consume more of hamburgers</u>

Explanation:

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\frac{MU_{x} }{P_{x} } = \frac{MU_{y} }{P_{y} }

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