Document1 - Microsoft Word Page Layout References Mailings Review View Hibri (Body)-11 AN ARBE 21 I Uab , XAVA ,,, | . A 14 Find Normal 1 No Spaci... Heading 1 2 Replace Heading 2 Title Subtitle Subtle Em.. Change Styles Font Select- Paragraph Styles Editing Where the elasticity of supply is equalto the elasticity of demand the series of reactions works out as shown in the Figure 1. The quantity in the initial, period (Qi) 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 perioda relatively shortsupply Q..CM This short supply gives a high price, P, where it intersects the supply curve. This high price calls forth a correspondingincreased production Qs, in the third, with a correspondinglow price, Ps. 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 o rotate around the path Q2, P2, Q., P, etc. Oligopolatie Pricing Kinked-Demand Model 9 Quantity 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? English (India) #O search O SH 10096 w + () ENG 15:02 25-06-2021