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sinerus sinerus
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5 years ago
Suppose that demand for a product falls, but prices are sticky. What is likely to happen to prices and output in that market, in the short run?
Textbook 

Survey of Economics: Principles, Applications and Tools


Edition: 6th
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Lightman030Lightman030
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5 years ago
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If prices are not flexible, they may not immediately adjust downward in response to the decrease in demand. So in the short run, prices may stay constant, and output might fall by more than would have happened if prices were flexible.
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