Consider the following dynamic supply-demand model:

Qd(t)=40-2p(t)-2p'(t)-p''(t)

Qs(t)=-4+2p(t)

In the above, p(t) denotes price in time t, Qd(t) and Qs(t) denote, respectively, quantity demand and quantity supplied in time t.

(a)Use the above system to derive a differential equation in p(t).

(b)Find the general solution for p(t).

(c)Does the limit of p(t) exist?

Answer rating: 100% (QA)

a To derive a differential equation in pt we need to equate the quantity demanded Qdt t... View the full answer