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Price Changes

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Why do you suppose firms tend not to change their prices immediately in response to changing demand and supply conditions? Does this have anything to do with the market structure that the firms operate in? Does it have anything to do with the global economy? Excess capacity? Current economic conditions?

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Firms tend not to change their prices immediately in response to changing demand and supply conditions due to numerous reasons. One of the reasons is definitely market structure. For example, the change in pricing strategy of a firm in response to changing demand and supply conditions will be ...

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Sandeep Bardia, MBA
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  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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