The animation above illustrates a case in which it is not. As we see, the price and quantity alternate, with high production and low prices followed by high prices and low production, but in such a way that the highs and lows keep getting more extreme. Even with a very tiny difference between the price in the market and the equilibrium price, the price and quantity produced spiral away from the equilibrium until they are off the diagram. We should say that this is a theoretical possibility. I do not know of any evidence that unstable cobweb processes exist in reality. But it's a disturbing possibility, in any case.
How Realistic?
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