in this this video we will solve a numerical on the market model equilibrium with the help of comparative static
we are given a demand function
Qd = a+ bQ
Qs = -c + dQ
where a, b, c, an d are greater than zero
we were told to find the effect on equilibrium price when the slope and intercept of demand function changes
also we were told to find the effect on equilibrium price when the slope and intercept of supply function changes
to find the solution we take the appropriate derivatives with respect to a b c and d to find the effect of change in the parameters on the equilibrium price
this has been shown in very simple language in this video
this question ruka yours the quotient rule of differentiation
Comparative-static analysis, more commonly known as comparative statics, compares the different equilibrium values of the endogenous variables resulting from changes in the values of the exogenous variables and parameters in the model. Comparative statics allows economists to estimate such things as the responsiveness of consumer demand to a projected excise tax, tariff, or subsidy; the effect on national income of a change in investment, government spending, or the interest rate; and the likely price of a commodity given some change in weather conditions, price of inputs, or availability of transportation. Comparative statics essentially involves finding the appropriate derivative
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