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If demand is represented by Qd = 50 -.5P +.005I where I is income and I=$50,000 and supply is represented by Qs = 100 +.4P - 2W where W is wages and W=$15.00.
a. Compute the equilibrium price and quantity where wages=W=$15.00.
b. Compute the equilibrium price and quantity if income falls to I=$40,000?
c. Plot the demand and supply for the two income level. In the graph, mark all values that fully identify the curve.
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