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(36 pts) Consider a stochastic version of the traditional cobweb model. The model was orig- inally developed to explain the volatility in agricultural prices, let
(36 pts) Consider a stochastic version of the traditional cobweb model. The model was orig- inally developed to explain the volatility in agricultural prices, let the market for a product. dt = a - Ypt St = b + Bp+ + c (1) St = dtWhat is the particular solution of pt ? How do you find it? (Show the process). (8 pts) Following the procedure, how do you find the genneral solution for pt. Assume that po is known
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