Consider the demand and supply system p = ad +bdqd +ud p = as +bsqs +us with the equilibrium condition qd = qs = q. The

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Consider the demand and supply system
p =
ad +bdqd +ud
p =
as +bsqs +us
with the equilibrium condition qd =
qs = q. The
parameters bd and bs are
−2 and 1.5, respectively. Find the
parameters ad and as are
such that q = 5 and p = 10.
Throughout this question use N = 100, and set the
random seed to 14022022. The
variable ud has a standard deviation
of 3. All randomly generated variables have a mean of zero and are
normally distributed unless something else is specified. All Monte
Carlo studies should be done with 10,000 repetitions.
Part c. Suppose you have access to a
variable z that is given
by z = us +ε
, where ε is a normally distributed random variable
with mean zero and standard deviation of 0.1. Use this variable to
obtain a better estimate of the demand equation.
Solve the question in Python language on Jupyter
notebook.