Consider an economy where the cost of a critical imported production input suddenly increases. If domestic firms decide to fully absorb this cost increase by accepting lower profit margins instead of raising their product prices, the price-setting curve will still shift downwards.
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Consider an economy where the cost of a critical imported production input suddenly increases. If domestic firms decide to fully absorb this cost increase by accepting lower profit margins instead of raising their product prices, the price-setting curve will still shift downwards.