The Use of Functional Differential Equations in the Model of the Meat Market with Supply Delay

Abstract

In economic applications, we have to make the assumption that relations between the variables vary with time. One of the possible ways of incorporating the process dynamics into the model is to describe the model by functional equations. The paper is based on the assumption that the balance between the demand and supply can be successfully expressed by a model described by differential equations, even if the goods are supplied with a certain delay. The equation is solved by modern theory. Theoretical results are illustrated by an example, with concrete results presented in graphical form. The solution is presented by modern computer simulation and the Maple system is used. The authors come to the conclusion that a delay in the supply of goods can cause an oscillation in the price. On the other hand, it is possible to define conditions under which the solution is monotonous.In economic applications, we have to make the assumption that relations between the variables vary with time. One of the possible ways of incorporating the process dynamics into the model is to describe the model by functional equations. The paper is based on the assumption that the balance between the demand and supply can be successfully expressed by a model described by differential equations, even if the goods are supplied with a certain delay. The equation is solved by modern theory. Theoretical results are illustrated by an example, with concrete results presented in graphical form. The solution is presented by modern computer simulation and the Maple system is used. The authors come to the conclusion that a delay in the supply of goods can cause an oscillation in the price. On the other hand, it is possible to define conditions under which the solution is monotonous.