Question: The estimated global supply function for coffee is Q = 9 + 0.5p. The estimated demand function is Q = 8.5 - p + 0.1

The estimated global supply function for coffee is Q = 9 + 0.5p. The estimated demand function is Q = 8.5 - p + 0.1 Y, where Y is the average income in thousand of dollars. The initial income is Y = 35 ($35.000). Determine :

a. The initial equilibrium price of coffee.

b. The initial equilibrium quantity of coffee.

c. Determine how the equilibrium price and quantity change if the average income increases by 15 to Y = 50.

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