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

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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?

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