Economics版 - Re: How can microeconomic theory explain that nominal prices adjust sl |
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q**i
发帖数: 174 | 1 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. | l****y
发帖数: 11 | 2 Thanks. But could you kindly clarify a little more clearly on the key points
if you take it as an exam question?
I have not come to that part in my ongoing macroeconomics course yet, so no
sufficient ideas about it. But some one wants me to give her a hand on this
question since she will re-sit in the exam soon.
The background text is in Romer. D "Advanced Macroeconomics", chap 5 and chap
6.
【在 q**i 的大作中提到】
: 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.
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