Italian firms mostly set prices based on standard mark-up rules, with some adjustments for customer-specific factors. Industrial firms are influenced by rival prices, while firms in manufacturing and services use price discrimination. Prices are slow to change, with most firms adjusting prices only once in 2002. Reasons for price stickiness include contracts, collusive behavior, and the perception of temporary shocks. Prices react differently to positive and negative shocks, with cost increases leading to higher prices and demand decreases more likely to prompt price changes. Market competition, customer search costs, and profit sensitivity affect how prices respond to shocks.