Are all prices in the economy equally inflexible? Which ones show large amounts of short-run flexibility? Which ones show a great deal of inflexibility over months or years?

The demand changes from time to time for goods in the market. The good price should also change according to the change in demand to remain at an equilibrium position where the supplied quantity is equal to the amount demanded. But prices are unable to adjust to these changes quickly. This resistive property of price is referred to as price inflexibility.

Goods from the agriculture and retail sectors adjust their prices within 3 to 4 months. Goods such as natural gas, corn, and flight tickets are some of the goods whose prices adjust to the demand of the good quickly. The price of natural gas adjusts to the demand within days, the price of corn adjusts to the demand within weeks, and the price of flight tickets adjusts to the demand within hours.

Goods whose prices show a great deal of inflexibility over months or years: Goods from the service and manufacturing sector usually take 8 months to a year to adjust their prices with the change in demand. For example, goods such as haircuts, newspapers, and rental houses take around a year to adjust their prices with demand changes. It shows that the price of these goods is highly inflexible to the changing demand.