By comparative static equilibrium analysis the economists usually mean the analysis of markets

Or economies in terms of their different equilibrium positions, without reference to the process by

Which adjustment between equilibria is achieved. Most non-mathematical economics is static in

This sense. It consists of comparing diagrams which represent snapshots of the state of a market at

A single point in time, and it aims to assess the characteristics of the equilibrium state and discover

The position of a new equilibrium when some variable is changed. For example, most demand and

Supply analysis is of this sort. An equilibrium is noted; then, the effect of a shift in demand or

Supply is analysed; its impact on price and quantity sold is determined, and the effect of demand or

Supply curves with different slopes can be assessed.

What is missing from such analysis is any trace of the path or speed of adjustment between

Different equilibria. In perfect competition, for example, firms are assumed to have no influence

On price and be unable to deviate from the going market rate at all — yet, by what process can the

market price change? As there is no auctioneer telling everybody what price to set, the price-takers

Themselves must also be the price-setters, even though this contradicts the basic assumption of the