The demand and supply functions of a commodity are given by Qd=D(P,PS,Y) Qs = S(P,To,Ro) where...

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The demand and supply functions of a commodity are given by Qd=D(P,PS,Y) Qs = S(P,To,Ro) where p is the price of the commodity, ps is the price of a substitute, We assume that Dp <0, Dy>0, Dps > 0, Sp>0, ST <0 and SR>0. d. Find do* дож ძQ* aps aRo and a. Write the equilibrium condition in a single equation. b. Verify that the implicit function theorem is applicable. Write the equilibrium identity. C. Find ap* ap* ap* aps' dy' R Discuss their economic interpretation. and ap* a To Yo . is income, To is the tax and Ro is rainfall. The demand and supply functions of a commodity are given by Qd=D(P,PS,Y) Qs = S(P,To,Ro) where p is the price of the commodity, ps is the price of a substitute, We assume that Dp <0, Dy>0, Dps > 0, Sp>0, ST <0 and SR>0. d. Find do* дож ძQ* aps aRo and a. Write the equilibrium condition in a single equation. b. Verify that the implicit function theorem is applicable. Write the equilibrium identity. C. Find ap* ap* ap* aps' dy' R Discuss their economic interpretation. and ap* a To Yo . is income, To is the tax and Ro is rainfall.

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a The equilibrium condition is given by the point where the quantity demanded Qd equals the quantity supplied QS Therefore we can write QdPPS0Y0 QSPT0R0 Substituting the expressions for Qd and QS QdPP... View the full answer