This equation is a first-order linear difference equation. The equilibrium price p* is defined in economics as the price that results in an intersection of the supply S(n + 1) and demand D(n) curves. Also, since p* is the unique fixed point of f (p) in (1.3.7), p* = B/(1 — A). (This proof arises later as Exercises 1.3, Problem 6.) Because A is the ratio of the slopes of the supply and demand curves, this ratio determines the behavior of the price sequence. There are three cases to be considered:
đang được dịch, vui lòng đợi..