what is price stickiness 
price stickiness is the resistance of a market price to change quickly despite shifts in the broad economy suggesting a different price is optimal sticky is a general economics term that can apply to any financial variable that is resistant to change when applied to prices it means that the sellers or buyers of certain goods are reluctant to change the price despite changes in input cost or demand patterns price stickiness would occur for instance if the price of a once in demand smartphone remains high at say 800 even when demand drops significantly price stickiness can also be referred to as nominal rigidity and is related to wage stickiness understanding price stickinessthe laws of supply and demand hold that quantity demanded for a good falls as the price rises and the quantity supplied rises when prices rise and vice versa most goods and services are expected to respond to the laws of demand and supply however this adjustment process takes time and with certain goods and services does not always happen very quickly due to price stickiness price stickiness or sticky prices refers to the tendency of prices to remain constant or to adjust slowly despite changes in the cost of producing and selling the goods or services this stickiness can have a number of important implications for the operations and efficiency of the economy for example from a microeconomic perspective price stickiness can induce the same welfare reducing effects and deadweight losses as government imposed price controls in a macroeconomic context it may mean that changes in the money supply have an impact on the real economy inducing changes in investment employment output and consumption rather than just nominal price levels 