Normally when aggregate demand increases, firms find it more profitable to raise prices than to leave prices unchanged the idea behind the small-menu-cost explanation for price stickiness is that firms will leave their prices unchanged if their profit gain from adjusting prices is less than menu costs they would incur if they change prices if firms anticipate that a rise in demand is likely to last for a long time then they wi
ll be a. less likely to increase their prices since their future profits will be lower than the small, one-time menu cost
b. more likely to increase their prices since their future profits will be higher than the small one-time menu cost
c. more likely to increase their production since their more profits will be higher than the menu cost
d) less likely to increase their production since their future profits will be lower than the menu cost

crow design, inc. is a web site design and consulting firm. the firm uses a job order costing system in which each client is a different job. crow design assigns direct labor, licensing costs, and travel costs directly to each job. it allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. direct labor hours (professional) 6,250 hours direct labor costs ($1,800,000 support staff salaries ,000 computer ,000 office ,000 office ,000 in november 2012, crow design served several clients. records for two clients appear here: delicious treats mesilla chocolates direct labor 700 hours 100 hours software licensing $ 4,000 $400 travel costs 8,000 1. compute crow design’s direct labor rate and its predetermined indirect cost allocation rate for 2012. 2. compute the total cost of each job. 3. if simone wants to earn profits equal to 50% of service revenue, how much (what fee) should she charge each of these two clients? 4. why does crow design assign costs to jobs?