Problem 5 (2 points): Consider the supply and demand equations: Qst=0.4Pt-1-5 QDt - 0.8Pt+55 a/ Assuming...

  

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Problem 5 (2 points): Consider the supply and demand equations: Qst=0.4Pt-1-5 QDt - 0.8Pt+55 a/ Assuming that the equilibrium conditions prevail, find an expression for Pt and Qt when Po = 75; b/ Is this system stable or unstable, explain why? Problem 5 (2 points): Consider the supply and demand equations: Qst=0.4Pt-1-5 QDt - 0.8Pt+55 a/ Assuming that the equilibrium conditions prevail, find an expression for Pt and Qt when Po = 75; b/ Is this system stable or unstable, explain why?

Answer rating: 100% (QA)

To find the equilibrium price Pt and quantity Qt we need to set the supply QS equal to the demand QD ... View the full answer