Assignment Help - homework help

  Stability of Equilibrium, Static stability and Dynamic Stability

Stability of Equilibrium:

1. Static Stability:

a) Walrasian Adjustment Process:

If excess demand (supply) exists, the market price will go up (down).

Excess supply (demand) price above (below) equilibrium price

ED(P) = D(P) − S(P) - Excess Demand Function

(dED(P)/dP)< 0

(Try to depict diagrams with stable and unstable conditions).

b) Marshallian Adjustment Process:

Housing market has very steep supply curve. It’s rigid to adjust price to eliminate any existence of excess demand or supply.

EDP(Q) = PD − PS = d(Q) − s(Q) : Excess Demand Price Function

(dEDP (Q)/dQ)<0

(Try to depict diagrams with stable and unstable conditions).

2. Dynamic Stability:

a. Discrete time (Cobweb Process):

Dt = −aPt + b (demand) (1)
St = αPt−1 − β (supply) (2) ( a, b,α ,β are all positive numbers).

Equilibrium condition implies that Dt = St .

So we get aPt +αPt−1 − b − β = 0 (3). And finally, rewriting w.r.t. Pt ,

Pt= −(α/a) *Pt-1+ (b+ β)/a

b. Continuous time (Differential Equation):

|slope of supply| >| slope of demand| (condition for dynamic stability)

Latest technology based Microeconomics Online Tutoring Assistance

Tutors, at the www.tutorsglobe.com, take pledge to provide full satisfaction and assurance in Microeconomics help via online tutoring. Students are getting 100% satisfaction by online tutors across the globe. Here you can get homework help for Microeconomics, project ideas and tutorials. We provide email based Microeconomics help. You can join us to ask queries 24x7 with live, experienced and qualified online tutors specialized in Microeconomics. Through Online Tutoring, you would be able to complete your homework or assignments at your home. Tutors at the TutorsGlobe are committed to provide the best quality online tutoring assistance for Microeconomics Homework help and assignment help services. They use their experience, as they have solved thousands of the Microeconomics assignments, which may help you to solve your complex issues of Microeconomics. TutorsGlobe assure for the best quality compliance to your homework. Compromise with quality is not in our dictionary. If we feel that we are not able to provide the homework help as per the deadline or given instruction by the student, we refund the money of the student without any delay.
Home | Company Overview | Services | Discover Q&A | Sitemap | Contact Us | T & C | Refund Policy | Copyright Policy | Blog | Q&A | Directory

©TutorsGlobe All rights reserved 2022-2023.