Solution-Express the equilibrium condition in matrix form

Express the equilibrium condition in matrix form

Assignment Help Business Economics

Reference no: EM133082745

Consider the following general equilibrium model with two competitive goods markets. In market 1, demand and supply are equal to QD1 = a-bP1 - eP2 and Qs1 = -f + gP1, respectively. In market 2, demand and supply are equal to QD2 = α-βP1 - εP2 and Qs = -Ø + yP2

All parameters are strictly positive.

a) Express the equilibrium condition in matrix form.

b) Using an echelon matrix, derive the condition under which a unique equilibrium exists.

c) Interpret this condition in terms of mathematics.

d) Using a graph, illustrate what happens if the condition derived in part b) is violated (there are two cases that you will want to cover).

Reference no: EM133082745

Questions Cloud

How technological change can generate a positive change : Explain how technological change can generate a positive change. Explain how technological change can generate a negative change.

Determine the new demand curve : Jerry the repairman works in the town of Prattville. Jerry would prefer not to pay income tax on the revenues he receives in exchange for performing household r

What is the impact of the tariff on producer surplus : A country named Lobbyland is a large economy trading freely in the world marketplace. However, the automobile industry has been recently lobbying the government

Prepare quantity sheet - utility building : Prepare Quantity Sheet - Utility Building Template - Commercial Construction Estimating and check the concrete recap for total cost

Express the equilibrium condition in matrix form : Consider the following general equilibrium model with two competitive goods markets. In market 1, demand and supply are equal to QD1 = a-bP1 - eP2 and Qs1 = -f

Moving away from free international trade : 1. It is conceivable that a country with an industry that exhibits external economies of scale, which the established advantage, would benefit by moving away fr

Slope of the monopolist marginal revenue curve : Consider a planet called Timber Hearth that is served by a monopolist. Market demand is P = 35 - 3 × QD, and the monopolist's marginal cost curve is MC = 7 + QS

Definition or understanding of globalization : Come up with own definition or understanding of globalization and pick some items or products that usually used and identify how globalization affects the items

Write out a detailed action plan : What research method should use to write out a detailed action plan on how you would proceed with this job.

User Account

All Pages

Express the equilibrium condition in matrix form

Reference no: EM133082745

Reference no: EM133082745

Questions Cloud

Reviews

Write a Review

Business Economics Questions & Answers

Economics assignment

Demand and supply curves

Long-run perfectly competitive equilibrium for the firm

Supply and demand diagrams

Case study: fisher-price toys

Draw the production possibility curve

Tax revenue

Maximize total welfare

Difference between the cv and the ev

Depict von neumann-morgenstern utility index u in a diagram

What is the market solution

Calculate gross national product and net national product

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT