Question: . Let the demand and the supply functions for a particular commodity satisfy Qdt =223Pt and Qst =2+Pt1 where Pt denotes the market price in

. Let the demand and the supply functions for a particular commodity satisfy

Qdt =223Pt and Qst =2+Pt1 where Pt denotes the market price in period t.

a) Find the general solution Pt.

b) Find the (steady-state) equilibrium price level, and analyze whether it is stable or not.

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