= Document1 - Microsoft Word ne Insert Page Layout References Mailings Review View M Agency FB 10 AA " % - 21 BIU-ahe x, x' A. . A. | . Heading 2 A nat Painter T Normal 1 No Spaci... Heading 1 Title Subtitle Subtle Em... Change Styles F Font Paragraph Styles E Where the clasticity of sunly.is.equal to the clasticitat demand the series.of reactions. works out as shown in the figure.l. The quantity in the initial, period (2) is large, producing a relatively low price where it intersects the demand curve at P. This low price, intersecting the supply curve calls forth in the next period a relatively short supply 12. CM This short supply gives a high price, P, where it intersects the supply curve. This high price calls forth a corresponding increased production lz in the third, with a corresponding low price, Pz Since this low price in the third period is identical with that in the first the production and price in the fourth, fifth, and subsequent periods will continue to rotate around the path (z. Pz. 13. Pz etc As long as price is completely determined by the current supply, and supply is completely determined by the preceding price, fluctuation in price and production will continue in this unchanging pattern indefinitely, without an equilibrium being approached or reached. This is true in this particular case because the demand curve is the exact reverse of the supply curve so that at their overlap each has the same elasticity. This case has been designated the case of continuous fluctuations" The passage is talking about? 1 Words: 220 English (India) Type here to search 100% 10 w ENG 15:00 25-06-202