Yeah. This is called "anchoring" in behavioral economics research. People can't let go of the price they last paid for the good as the "correct" price, and so are reluctant to drop to the true market-clearing price.

This is also why cereal makers rely on shrinkflation to raise prices, and why home prices are sticky downwards, and why companies resort to layoffs rather than wage cuts. In an individual consumer's mind, prices should stay the same.