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What are menu costs and why do they create an issue in economics

What are menu costs and why do they create an issue in economics
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There are different costs of inflation and menu costs are one of them. The terminology has been developed from the cost of frequent changes being made in the menu of restaurants in event of rapidly changing inflation.

Otherwise also, these costs represent the cost that are incurred to a firm when it has to make frequent price changes to match the changes in the overall price level. Basically this is the cost of changing the list prices of various goods and services sold by the company.

They create an issue in economics because they represent a significant cost of inflation. For this reason, companies are very careful in changing their list prices because this can radically reduce their sales.

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