Price Dynamics Curve (PDC) and its Slope

Consider a diagram where the current price of a good ($P_t$) is plotted on the horizontal axis and the price of that same good in the next time period ($P_{t+1}$) is plotted on the vertical axis. A reference line is drawn on this diagram that passes through all points where the price does not change between the two periods (i.e., where $P_{t+1} = P_t$). If the current state of the market is represented by a point located above this reference line, what can be inferred about the price dynamics?

In a diagram that plots the current price ($P_t$) on the horizontal axis and the next period's price ($P_{t+1}$) on the vertical axis, it is possible for a market to be in a stable, unchanging equilibrium at a point that is not on the 45-degree line.

Interpreting Price Dynamics

Identifying Equilibrium Price