DSGE models explicitly posit that firms have some pricing power; that is, there is imperfect competition so that a firm can choose to sell more of its output by lowering its price or to sell less of its output by raising its price, and the firm will set its price at a markup over marginal cost to maximize its profits.
DSGE models also assume that firms are able to only  6  Athanasios Orphanides and Simon van Norden, “The Reliability of Inflation Based on Output Gap Estimates in Real Time,” Journal of Money, Credit and Banking, 37 (2005), pp. 583–601. 4  BIS central bankers’ speeches  adjust prices infrequently.