Equilibrium and price What are the problems that may arise in establishing market equillibrium if current supply depends on past prices?

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If current supply is set by past prices, that means it was set by past demand. There might be a sudden new demand, and there will not be enough supply to meet it or prices will be artificially low and the company will lose profits it could have made.
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There can be a lag.  Let's say past prices have been low and so supply is low.  But now there is an increased demand for the product.  All of a sudden, there's a shortage.  So then producers increase supply because prices are high.  But what if demand goes down?  So if demand is unstable, this can be a problem for establishing a stable equilibrium.

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