are100a-handout-1

are100a-handout-1 - University of California, Davis...

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University of California, Davis Department of Agricultural Economics ARE 100A Richard Howitt Handout # 1 Winter 2010 Shifts in Supply Functions Demand Supply () D QD P = (, ) S QS P f = Equate supply and demand quantities to solve for the equilibrium price DP SP f = Since the price in the real estate market is a function of foreclosures we define Pp f = the equilibrium is now (() ) , ) Dpf S f f ρ = Applying the chain rule for derivation to both sides—note the partial derivatives ) dD p f dP S p f f dP S p f f dP df P df f ∂∂ =+ Simplifying the notation inside the parentheses to , we can rewrite: dD dP S dP
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This note was uploaded on 03/18/2010 for the course ARE 100A taught by Professor Constantine during the Winter '08 term at UC Davis.

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