Question: Consider a simple one-commodity market model: Q = a-bP Q==c+dP with solutions: P* = and Q* = a+c b+d ad-bc b+d (a, b >

Consider a simple one-commodity market model: Q = a-bP Q==c+dP with solutions: P* = and Q* = a+c b+d ad-bc b+d (a, b > 0) (c,d > 0) " [demand] [supply] 1. Mathematically show using derivatives and explain in words what happens to Q* when a, b, c, and aq* d increases. (Hint: Find a aq* do* ' " d 2. Confirm your answer in item (1) by illustrating the comparative statics in a supply and demand diagram.

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