Question: The demand for cookies is given by Q^D = 425 - 2P where Q^D is the quantity demanded of the cookies (number of cookies per

The demand for cookies is given by Q^D = 425 - 2P where Q^D is the quantity demanded of the cookies (number of cookies per day) and P is the price of cookies ($/cookie). The supply of cookies is given by Q^S = 5 + 3P where Q^S is the quantity supplied of the cookies (number of cookies per day) and P is the price of cookies ($/cookie).

a. Find the equilibrium price and quantity.

b. Let's say, other things equal, bakers have improved their technology to produce cookies and the supply increases - the quantity supplied increases by 60 cookies per day at every possible price. Find the new equilibrium price and quantity.

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