Question

which is the Cobweb model

Answer 1

The cobweb model or cobweb theory is an economic model that explains why prices might be subject to periodic fluctuations in certain types of markets. It describes cyclical supply and demand in a market where the amount produced must be chosen before prices are observedThe cobweb model or cobweb theory is an economic model that explains why prices might be subject to periodic fluctuations in certain types of markets. It describes cyclical supply and demand in a market where the amount produced must be chosen before prices are observed.This model is known as the Cobweb model because, the path taken by the observed price and quantity resembles a cobweb. Now go into the question of convergence or otherwise of the current price towards the equilibrium price