Question
With regard to achievement of stability of equilibrium in an isolated market assume that the market for string beans is found to have a lagged
With regard to achievement of stability of equilibrium in an isolated market assume that the market for string beans is found to have a lagged supply response such that the demand and supply function may be written as Dt = aPt + bSt = AP t-1 + BRequired: Derive the conditions for dynamic stability of equilibriumSuppose that a consumer is consuming 10 units of a discrete good and the price increases from Ksh 5 per unit to Ksh 6. However, after the price change the consumer continues to consume 10 units of the discrete good. Demonstrate the loss in the consumer's surplus from this price change?
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