This is the real cobweb theorem from economic dynamics — the mechanic implied by
"market dynamics" — not a decorative scatter. Producers commit to output based on
last period's price, so supply lags demand by one period. Each period the market still
clears (quantity supplied = quantity demanded), giving a discrete recurrence:
Q_d(t) = A − b·P(t)
Q_s(t) = C + d·(P(t−1) − tax)
market clears ⇒ P(t) = (A − C − d·(P(t−1) − tax)) / b
The Z axis of the scene is literally time — every period's staircase step
(supply reacts horizontally, price clears vertically) is drawn one slice deeper, so orbiting the
scene shows the spiral either tightening onto the equilibrium pillar (stable, d/b < 1),
circling forever (d/b = 1), or flying outward (unstable, d/b > 1).
Tax incidence and welfare use the standard closed-form triangles:
- CS = ½·(A/b − P*)·Q*
- PS = ½·(P* − tax − (−C/d))·Q*
- Deadweight loss = ½·tax·(Q₀* − Q*), Q₀* being the no-tax equilibrium quantity