Can you show me step by step the process how solving for R^* was made possible

Algebra: Structure And Method, Book 1
(REV)00th Edition
ISBN:9780395977224
Author:Richard G. Brown, Mary P. Dolciani, Robert H. Sorgenfrey, William L. Cole
Publisher:Richard G. Brown, Mary P. Dolciani, Robert H. Sorgenfrey, William L. Cole
Chapter9: Systems Of Linear Equations
Section9.1: The Graphing Method
Problem 4CE
Question
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Can you show me step by step the process how solving for R^* was made possible

Solution
In the short-run the relevant equations (given the definition of equilibrium) are:
Q = – bR
V = V – BR
S = Q +V
The last equation can be rewritten as V = S – Q. Substituting this expression in the demand for
vacant space gives:
S- Q = V – BR
which together with the demand for occupied space and the fact that the stock S is fixed provide us
with a system of 2 equation on 2 unknowns (Q, R). Solving for R gives:
ē +V - s
R*
B +b
which shows the standard result that increases in the demand for either occupied or vacant space
(shifts in Q or V ) will increase rents.
Transcribed Image Text:Solution In the short-run the relevant equations (given the definition of equilibrium) are: Q = – bR V = V – BR S = Q +V The last equation can be rewritten as V = S – Q. Substituting this expression in the demand for vacant space gives: S- Q = V – BR which together with the demand for occupied space and the fact that the stock S is fixed provide us with a system of 2 equation on 2 unknowns (Q, R). Solving for R gives: ē +V - s R* B +b which shows the standard result that increases in the demand for either occupied or vacant space (shifts in Q or V ) will increase rents.
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