Hey I have a difficult problem here:
The demand for a good is given
Q=a-b*P
What is the interpretation of a and b?
Make a demand curve? ( i can do that)
The supply of the good is given by
Q = B(P-C)
C can be interpretated as the lowest price to which the company will produce the good.
What is the interpretation of B?
Make a supply curve? ( i can do that)
Find the equilibrium mathematicaly?
How is the equilibrium price and quantity chanched by a increase in a?
How is the equilibrium price and quantity chanched by a increase in a?
Q= quantity P= price