Question: 3 2. Consider the market for solar-powered umbrellas defined by the following two equations. Demand: Q D = a - bXP+f xX Supply: Qs =

3 2. Consider the market for solar-powered umbrellas defined by the following two equations. Demand: Q D = a - bXP+f xX Supply: Qs = c+d xP+g xz The following definitions pertain: QD = quantity demanded per week Qs = quantity supplied per week P = currency price per umbrella X = total rainfall forecast per week Z = price of solar cells (an input for manufacturing the umbrellas) a, b, c, d, f, and g are constants 2a. Solve for the equilibrium price and the equilibrium quantity of umbrellas in this market. 2b. What happens to the equilibrium quantity and price if the total rainfall forecast next week is higher than it was this week

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