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Economics

Question: The demand and supply functions in a competitive market are

Q_d = 280 - 4P and Q_s = -35 + 8P

and price is currently 19. When not at equilibrium the rate of adjustment of price is

dP = 0.28(Q_d - Q_s)
dt

Derive and solve the relevant differential equation to get a function for P in terms of t and use the solution to explain how close price will be to its equilibrium value after seven time periods.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M92291200

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