Small menu costs are a common reason offered for the existence of

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Small menu costs are often cited as the reason for sticky prices. When firms face small costs to adjust their prices, they may choose to delay price adjustments until the costs of making the adjustment are outweighed by the benefits of correcting the market price. As a result, prices appear "sticky" and do not adjust as quickly or as often as would be expected in a perfectly flexible market. This can lead to market inefficiencies and distortions, particularly during times of economic shocks or disruptions.

Small Menu Costs Are a Common Reason Offered for the Existence