Price stickiness tends to moderate over time.

Question

Quizplus · Accepted Answer

Price stickiness refers to the tendency of prices to remain relatively fixed in the short term, even in the face of changes in supply and demand. However, over time, as market conditions adjust and economic agents adapt, prices may become more flexible and adjust to changes in supply and demand. This can happen, for example, as firms face competitive pressure or as consumers adjust their expectations about prices. Therefore, price stickiness tends to moderate over time.

Price Stickiness Tends to Moderate Over Time