Question

Sam manages a grocery store in a country experiencing a high rate of inflation. to keep up with inflation, he spends a lot of time every day updating the prices, printing new price tags, and sending out newspaper inserts advertising the new prices. his employees regularly deal with customer annoyance over the frequent price changes. this is an example of the of inflation.

Answer 1

This is an example of the menu costs of inflation. A menu cost is the cost incurred to a firm resulting from changing its prices. The name stems from the cost of restaurants literally printing new menus, but economists use it to refer to the costs of changing prices in general, printing new tags and sending newspaper inserts to advertise the new price,