Cobweb Model Definition

noun

An economic model that ascribes the periodic price fluctuations in certain types of market to cyclical supply and demand where the amount produced must be chosen before prices are observed, and producers' expectations about prices are assumed to be based on observations of previous prices.

Wiktionary

Origin of Cobweb Model

  • So called because it can be represented diagramatically as curves overlaid on a spiral, resembling a spider's web.

    From Wiktionary

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cobweb model