This paper explores the possibilities for complex dynamic behaviour in
an industry where a fixed capital good, once acquired and installed,
is specific to that industry. A central theme is to understand the sor
ts of factors which can impose bounds on the behaviour of market price
and which can impart stability to the system. The analysis highlights
the significance not only of the durability and specificity of physic
al capital goods but also of capacity (under-) utilisation decisions a
nd of the cautiousness of producers when expanding their capacities.