|Overview: Menu Costs|
|Definition||The cost of changing your prices.|
|Examples||Advertising and promotion of new prices. Packaging and signage. Legal notices and regulatory approvals.|
|Related Concepts||Sticky Prices|
What are Menu Costs?
John Spacey, updated on December 06, 2015
Menu costs are the costs a firm incurs to change its prices. The name stems from the cost for a restaurant to print new menus.The cost of changing prices is one way to explain sticky prices, or the tendency for prices to stay at an established range when economic forces are pushing them up or down. Menu costs differ widely by industry. For example, ecommerce firms typically have low menu costs and may frequently experiment with prices.
Business CostsThis is the complete list of articles we have written about business costs.
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