Question: Consider a certain commodity that is produced by many companies and purchased by many other firms. Over a relatively short period, there tends to be

Consider a certain commodity that is produced by many companies and purchased by many other firms. Over a relatively short period, there tends to be an equilibrium price p₀ per unit of the commodity that balances the supply and the demand. Suppose that, for some reason, the price is different from the equilibrium price. The Evans price adjustment model says that the rate of change of price with respect to time is proportional to the difference between the actual market price p and the equilibrium price. Write a differential equation that expresses this relation. Sketch two or more solution curves.

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