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The following set of demand and supply functions describes the behaviors of buyers and sellers in the market for an agricultural commodity over a period.
The following set of demand and supply functions describes the behaviors of buyers and sellers in the market for an agricultural commodity over a period. QtD=A0A1Pt Marking Scheme QtS=B0+B1Pt1 (a) At the market equilibrium, find the difference equation for price (P). (5 marks) (b) Let A0=200,B0=100,A1=5 and B1=4. Find the unique solution for P1, the long run equilibrium price and quantity, given that P0=$10. (15 marks) (c) Discuss the movement and stability of equilibrium price in the long run
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