For example, when setting the price of ramen noodles, firms make their outlooks for the price of ingredients and the wages of part-time workers and add an appropriate profit margin to determine the price. Since frequent price changes may confuse customers, prices are not revised that frequently.
At the firm level, an important characteristic of the American economy is that we have a business culture that rewards nimbleness, innovation, and entrepreneurship. As an example, consider the case of U.S. retail trade. To be sure, firms in this industry invested heavily in information technology in the 1990s.