Continuous dynamic systems59Given linear demand and supply then there is only one fixed point. The systemis either globally stable or globally unstable. It is apparent from figure 2.16 that thefixed point is an attractor, as illustrated in figure 2.16(b). Furthermore, the differ-ential equation is negatively sloped for all values ofp.In other words, wheneverthe price is different from the equilibrium price (whether above or below), it willconverge on the fixed point (the equilibrium price) over time. The samequalita-tivecharacteristics hold for example 2.5, although other possibilities are possibledepending on the value/sign of the parameterf.Example 2.6 on population growth, and example 2.7 on radioactive decay, alsoexhibit linear differential equations and are globally stable/unstable only forp=0 andn=0, respectively. Whether they are globally stable or globally unstabledepends on the sign of critical parameters. For example, in the case of Malthusianpopulation, if the population is growing,k>
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