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top   »  economics   »  price economics   »  sticky prices

What are Sticky Prices?

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Sticky prices is a tendency for prices say at a well established price range despite changes in supply or demand. In other words, some prices tend to resist change despite economic forces that would typically push the price up or down.
The affect of sticky prices can be seen in product prices, salaries and asset prices. For example, companies in a particular industry may resist increasing a wage beyond an established range even if that range no longer attracts enough qualified applicants. This can be seen the result of factors such as resistance to change.
Overview: Sticky Prices
Area
Economics
Definition
Prices that stay the same despite being pushed by changes in supply and demand.
Related Concepts
Equilibrium

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