MATH23: DIFFERENTIAL EQUATION

SOUTH EAST ASIAN INSTITUTE OF TECHNOLOGY, INC.

National Highway, Crossing Rubber, Tupi, South Cotabato

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LOGISTIC GROWTH AND THE PRICE OF COMMODITIES

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Group A
Bayas, Patrick D.
Ferrer, Jane Michelle C.
Tonogbanua, Angelo Christian P.
Tumbiga, Charmaine R.
LOGISTIC GROWTH AND THE PRICE OF COMMODITIES

Learning Objectives

1. Describe the concept of carrying capacity in the logistic model of population growth.
2. Solve a logistic equation and interpret the results.

Differential equations can be used to represent the size of population as it varies over
time. To model population growth using a differential equation, we first need to introduce
variables and relevant terms. One problem for this function is its prediction that as time goes
on, the population grows without bond.

Price of Commodities
are based on the supply and demand of commodities.

What is Logistic Population Growth?

A group of individual of the same species living in the same area is called population.
The measurement of how the size of the population changes over time is called the
population growth rate, and it depends upon the population size, birth rate and death rate.
As long as there are enough resources available, there will be an increase in the number of
individuals in a population over time. However, as these resources begin to run out, population
growth will start to slow down. When the growth rate of a population decreases as the number
of individuals increases, this is called logistic population growth.

Numerous attempts have been made to develop models to study the growth of
populations.

One means of obtaining a simple model for that study is to assume that the average birthrate
per individual is a positive constant and that the average death rate per individual is
proportional to the population.

If we let x (t) represent the population at time t, the assumptions above lead to

the differential equation

1 dx
=b−ax (1)
x dt

where b and a are positive constants. This equation is commonly called the logistic equation
and the growth of population determined by it is called logistic growth.

The variables in the logistic equation may be separated to obtain

 dx 1 a
x(b−ax)
=dt or +
x b−ax (
dx=b dt )
dx
∫ x (b−ax) =∫ dt or ∫ ( 1x + b−ax
a
)dx =∫ b dt
Integrating both sides gives us

x x
ln |b−ax |=bt +c |b−ax |=e e
or
c bt
(2)

To expedite the study of equation (2), let us assume further that at t = 0 the population
is the positive number x 0. Then equation (2) may be wriiten

x x0
= e bt
b−ax b−a x 0

and upon solving for x, we have

b x 0 e bt
x (t)=
b−a x 0 +a x 0 e bt
(3)

It is interesting to note that the population function obtained in equation (3) has a limiting
value

b x 0 e bt
lim x ( t )=lim ¿ ¿
t→∞ t→∞ b−a x 0+ a x 0 e bt

lim b x 0 ebt
¿ t→∞
a bx 0 ebt

a
¿
b
where we have used L'Hospital's rule to evaluate the limit.

We should also note that the logistic equation (1) will dictate growth or decline in the
population, depending upon whether the initial population is less than or greater than b/a.

We consider an economic model of a certain commodity market. We assume that the

price P, the supply S, and the demand D of that commodity are functions of time and that the
rate of change of the price is proportional to the difference between the demand and the
supply. That is,
dP
=k ( D−S ) (4)
dt
We assume further that the constant k is positive so that the price will increase if the
demand exceeds the supply.

Different models of the commodity market will result, depending upon the nature of the
demand and supply functions that are indicated. If, for example, we assume that

D=c−dP and S=a+bP (5)

where a, b, c, and d are positive constants, substitute (5) to (4) we obtain a differential
equation
dP
=k [ ( c−a )−( d+ b ) P ] (6)
dt

that is linear in, P. The assumptions (5). Reflect the tendency for the demand to decrease as
the price increases and the tendency for the supply to increase as the price increases, both
reasonable assumptions for many commodities. We should also assume that 0 < P < c/d, so
that D is not negative.

Equation (6) may be written

dP
+ k ( d +b ) P=k ( c−a ) (7)
dt

and solved by multiplying by the integrating factor e k (d +b ) t and integrating to obtain

c−a
P ( t ) =c 1 e−k ( d+ b) t +
d+ b
lf the price at t=0 is P= Po, we have
c−a
c 1=P0 −
d +b

So that

c−a −k (d +b ) t c−a
P ( t ) =P 0− e + (8)
d+ b d +b
Equation (8) shows that under the assumptions of (4) and (5) the price will stabilize at a value
(c-a)/( d+b) as t becomes large.

Example 1:

A certain population is known to be growing at a rate given by the logistic equation

dx
=x( b−ax). Show that the maximum rate of growth will occur when the population is equal
dt
b
to half its equilibrium size, that is, when the population is
2a
Solution:

d (bx−a x 2 )
=0
dx
b−2 ax=0
b
x=
2a
b
Therefore, the minimum rate of growth will occur when population is .
2a

Example 2:

A bacterial population is known to have a logistic growth pattern with initial population
1000 and an equilibrium population of 10,000. A count shows that at the end of 1 hr there are
2000 bacteria present. Determine the population as a function of time.

Solution:

M
L(t)=
10000
1+( −1) e−kt
1000
M
L(t)=2000=
10000
1+( −1)e−k
1000
 1000
2000=
1+9 e−k

1+9 e−k =5

9 e−k =4
4
e−k =
9

e−k =0.4
1
k=
0.4
k =0.81
10000
L(t)=
1+9 e−kt

Example 3:

For the population of Exercise 2, determine the time at which population is increasing
most rapidly and draw a sketch of the logistic curve.

L
Solution: N(t) = 1+( L −1) e−kt
No

1000
N(1) = 2000 = 10000
1+ (
1000
−1 e−k )
1000
2000 =
1+ 9 e−k
1+9e−k =5

9e−k =4

e−k =0.4
k = 0.81093
1000
N(t) =
1+(9)e−0.81093t
 7298.37
N’(t) =
1+¿ ¿

N’’(t) =1000 ¿

(The time at which the population is increasing most rapidly is the value of t when N’’(t)=0)

1000 ¿=0

106.532 e−1.62186t −5.91847 e−1.62186t ¿

Let p = e−0.81093t

106532 p2−59184.7 p ( 1+ 9 p )=0

106532 p2−59184.7 p−532662.3 p2=0

532662.3 p 2−5.9184 .7 p=0

p = 0, 0.11111

e−0.81093t =0.11111 ,t=2.70952 ≈ 2.7 hours

Therefore, the time at which the population is increasing most rapidly is 2.7 hours

Graph:
Key Concepts:

 When studying population functions, different assumptions – such as exponential

growth, logistic growth – lead to different rates of growth.
 The logistic differential equation incorporates the concept of a carrying capacity. This
value is a limiting value on the population for any given environment.
 The logistic differential equation can be solved for any positive growth rate, initial
population and carrying capacity.