Let the supply of one commodity be given as q' = S(p), where q' is the...
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Let the supply of one commodity be given as q' = S(p), where q' is the quantity supplied and p is the price. Let the demand of the commodity be given as q = D(p.m), where qd is the quantity demanded and m is the income. Assume perfect competition such that qqq. Furthermore, let the SO and DO) functions possess continuous derivatives and let aD/ap<0, 2D/am>0, and as/ap> 0. Use the Implicit Function Theorem to do comparative statics for oqlam and ap/êm given initial equilibrium values q' and p.
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Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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