1.   Assuming the new equilibrium price is instantly established, they derived an expression for the change in price between transactions.

2.   How then would the new equilibrium be achieved?

3.   With the cash equivalent of the in-kind subsidy, the consumer can select any combination of Y and X.

4.   A shift in either Ms or L will lead to a new equilibrium quantity of money and rate of interest at the new intersection of the curves.

5.   With the help of the auctioneer and the ttonnement process, this new equilibrium position would be established instantaneously.

6.   The neo-classical analysis can be justified only if the new equilibrium positions are reached quickly.

7.   Transactors will have to search for the new equilibrium values themselves.

8.   However, no new equilibrium position is reached in the case of an explosive cycle, as is shown in the next example.