The CobWebs

The Cobweb model is an economic concept explaining how prices and quantities can fluctuate over time in markets with delayed supply responses. When prices rise, producers see an opportunity to supply more, but it takes time to increase production. Meanwhile, consumers may demand less at higher prices. This lag can cause prices and supply to overshoot or undershoot their equilibrium levels, creating cyclical oscillations or "cobweb" patterns. Essentially, it illustrates how supply and demand adjustments over time can lead to periodic fluctuations in market prices and quantities.