Question
Economics Question on Logarithmic Differentiation
Given below are two statements, one is labelled as Assertion (A) and the other is labelled as Reason (R):
Assertion (A) : For a differential equation x + ax = b for a≠0 , F(x)=x=b-ax and the equilibrium is at x=ab. This a equilibrium is stable for a > 0. Reason (R) : The equilibrium is obtained for x=b-ax=0 or x=ab. Stability is obtained when F'(x) is <0. Here F'(x) = -a and so the equilibrium is stable if a> 0.
In the light of the above statements, choose the correct answer from the options given below:
Both (A) and (R) are true and (R) is the correct explanation of (A)
Both (A) and (R) are true but (R) is not the correct explanation of (A)
(A) is true but (R) is false
(A) is false but (R) is true
Both (A) and (R) are true and (R) is the correct explanation of (A)
Solution
The correct answer is (A) : Both (A) and (R) are true and (R) is the correct explanation of (A)