A Mathematical Study of COBWEB Model for Economic Demand Analysis
In order to illustrate the various significant applications of first order differential equations specifically in the field of economical analysis, there are especially two models for a single commodity in particular. The first model is known as ‘COBWEB Model’ and the second model is referred as ‘Market Model’. The first model is having significant merits when compared to the second model in terms of price-demand analysis. Mathematically, this model is simple to analyze. The COBWEB model could be applied to the prices and output of commodities whose production is not continuous in nature. Thus, this model assumes the present’s demand for any commodity is a function of price. Hence, in this paper much emphasis is given to study about the mathematical analysis of the COBWEB model and its various diagrammatic representations.