Write demand and supply equations that represent demand, D0, and supply, S0, in Figure A5-1 in this appendix.
a. Solve for equilibrium price and quantity mathematically. Show your work.
b. Rewrite the demand equation to reflect an increase in demand of 3 units. What happens to equilibrium price and quantity?
c. Rewrite the supply equation to reflect a decrease in supply of 3 units at every price level. What happens to equilibrium price and quantity using the demand curve from b?