  In two previous papers the author developed a second-order price adjustment
(t\^atonnement) process. This paper extends the approach to include both
quantity and price adjustments. We demonstrate three results: a analogue to
physical energy, called "activity" arises naturally in the model, and is not
conserved in general; price and quantity trajectories must either end at a
local minimum of a scalar potential or circulate endlessly; and disturbances
into a subspace of substitutable commodities decay over time. From this we
argue, although we do not prove, that the model features global stability,
combined with local instability, a characteristic of many real markets.
Following these observations and a brief survey of empirical results for
price-setting and consumption behavior in markets for "real" goods (as opposed
to financial markets), we conjecture that Stigler and Becker's well-known
theory of consumer preference opens the possibility of substantial degeneracy
in commodity space, and therefore that price and quantity trajectories could
lie on a relatively low-dimensional subspace within the full commodity space.
