Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need help in part C, thankss The supply and demand sets for a market are 3 = {(w) Ip 3q= 6} and D = {(q,p)

need help in part C, thankss

image text in transcribed
The supply and demand sets for a market are 3 = {(w) Ip 3q= 6} and D = {(q,p) |p+ 2q=16}. (a) Find the equilibrium price and quantity for this market. (b) The cobweb model dictates that, for t 2 1, a market will evolve according to the formulae Qt = QSUJtI) and Pr = PD(qt]- Find a recurrence equation which describes how the price changes with time if this market evolves in accordance with the cobweb model. If the initial price is tenJ solve this equation and describe how pg behaves as t increases. Also nd Q; as an explicit function of t. (c) If the government imposes a percentage [of the price] tax of 100r% on the sale of goods in this market, the price including the tax is p... and the equilibrium price is now determined by the equation qsa - m) = qD(a-l- Find the equilibrium price and quantityr for this market in the presence of this tax. For what values of 1' will this equilibrium be economically meaningful

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

OPEC Twenty Years And Beyond

Authors: Ragaei El Mallakh

1st Edition

1317244737, 9781317244738

More Books

Students also viewed these Economics questions