## Consider the supply and demand equations: QSt = 0.4Pt-1-5

Consider the supply and demand equations: QSt = 0.4Pt-1-5 QDt = -0.8Pt + 55 a/ Assuming that the equilibrium conditions prevail, find an expression for Pt and Qt when P0= 75; b/ Is this system stable or unstable, explain why? EXPERT ANSWER