Re: How can microeconomic theory explain that nominal prices adjust sl# Economics - 经济
q*i
1 楼
competitive pressure + firm's pricing behavior?
Most companies have a retro-look on pricing and there is usually a lag
between making lower profits and realizing it. The competitive pressure
plays into the game in the sense that the first company who adjusts its
prices during a cost upswing will price itself out of the market.
customer expectation plus willingness to pay for price stability (
thus long-term contract and its use) may also contribute to this.
Most companies have a retro-look on pricing and there is usually a lag
between making lower profits and realizing it. The competitive pressure
plays into the game in the sense that the first company who adjusts its
prices during a cost upswing will price itself out of the market.
customer expectation plus willingness to pay for price stability (
thus long-term contract and its use) may also contribute to this.
