Question: 1.Suppose specific demand and supply equations are D t = -0.8P t + 86 S t = 0.2P t-1 - 10 Required: Determine equilibrium price

1.Suppose specific demand and supply equations are

Dt = -0.8Pt + 86

St = 0.2P t-1- 10

Required: Determine equilibrium price and quantity. Is the equilibrium stable? Why or why not?

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