Differential Equations in Economics

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Question 1 of 14

In a simple economic model, the demand for a product is given by the differential equation (\frac{dQ}{dt} = -aQ + bP), where (Q) is the quantity demanded, (P) is the price, (a) and (b) are positive constants. What is the equilibrium price?

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$\frac{b}{a}$

$\frac{a}{b}$

$\frac{a+b}{2}$

$\frac{a-b}{2}$

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