if a cobweb is convergent, then why do price and quantity still fluctuate with time?

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if a cobweb is convergent, then why do price and quantity still fluctuate with time?

Qualify this fluctuating behavior. Explain the conditions that make a cobweb model of supply and demand fluctuate.

2007-03-20 15:38:37 · 2 answers · asked by Gelopy 1 in Social Science ➔ Economics

2 answers

The above answer is fine, but somewhat incomplete. The answer is economic shocks. These can be any number of things, such as technology or price level fluctuation. Others shocks may include policy changes (taxes), changes in resource prices (oil), natural disasters, etc.

2007-03-21 05:33:36 · answer #1 · answered by a_liberal_economist 3 · 0⤊ 0⤋

Basically over time, the overall prices increase which is a result of technology and inflation, thus the cobweb model of supply and demand fluctuates.

2007-03-20 15:59:07 · answer #2 · answered by Santa Barbara 7 · 0⤊ 0⤋