D₁ Short-run supply Long-run supply D₂ $20.00 $25.00 $22.00 20 25 28 Market quantity Price (dollars) Demand up by 10: short-run price $25 (up $5), long-run price $22 (up $2). The price overshoots to $25 while only incumbents can respond, then settles to $22 as entry flattens supply.

Drag the gold demand curve to the right (or focus it and use the arrow keys). Watch the price overshoot on the steep short-run supply, then settle on the flat long-run supply.