Consider the following market model: Qd t = 10 Qs t = −1 + 2Pt Pt+1...

Consider the following market model: Qd t = 10 Qs t = −1 + 2Pt Pt+1 = Pt − 0.1(Qs t − Qd t ) where P is the price, Qd is the quantity demanded, Qs is the quantity supplied and t is time period. Set up a difference equation in terms of market price P, present its general solution, and draw a phase diagram(Cobweb Model).

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Rahul Sunny answered 8 months ago

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