Nonmonotonic Demand and Supply Curves
In the previous chapter, we saw chaos emerge in a model of a consumer’s demand for a good. In this chapter, we model chaos as a result of particular interactions between demand and supply of a good. Before we do this, let us briefly review the workings of a market characterized by demand and supply curves. Let us assume that demand and supply are not instantaneously equated with each other. Rather, adjustments in demand and supply take time.
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