Problem 1. Consider a market in which the supply and demand sets are
S = \{(q, p) : q = 3p - 7\}, D = \{(q, p) : q = 38 - 12p\}.
Write down the recurrence equation which determines the sequence $p_t$ of
prices, assuming that the suppliers operate according to the cobweb model.
Find the explicit solution given that $p_0 = 4$, and describe in words how the
sequence $p_t$ behaves. Write down a formula for $q_t$, the quantity on the market
in year t.
