Tag Archives | Static Stability

In this article we will discuss about the definition and conditions for static stability.  Definition of Static Stability: In Fig. 4.1, the market equilibrium is obtained at the point E0 (p0, q0). Suppose now that the market is disturbed by a rightward shift of the demand curve from D0D0 to D1D1. Because of this disturbance, quantity demanded (qd) becomes larger [...]