Suppose the monthly demand and supply for iPods are given by the following equations:
P = 500 - 0.001Q^d Demand Curve
P = 200 + 0.0005Q^S Supply Curve

a. Use the demand and supply curves to solve for the equilibrium price and quantity. Create a diagram to depict this equilibrium.

b. Rewrite the demand curve as an expression that shows quantity demanded (Q^d) in terms of the price.

c. Rewrite the supply curve as an expression that shows quantity supplied (Q^s) in terms of the price.

d. Use the demand and supply curves you derived in parts (b) and (c) to solve for the equilibrium levels of price and quantity. How does this result differ from part (a)? Briefly explain why this is so.

e. Suppose the introduction of new low cost smart phones that also play music causes the demand curve for iPods to shift to P = 425 - 0.001Q^d. Derive the resulting new equilibrium levels of price and quantity. Show in a diagram this new equilibrium along with the initial equilibrium location. Are Apple shareholders pleased by this outcome? Briefly explain why or why not.

f. Suppose instead that the offshoring of the production of iPods to a lower cost country causes the supply curve to shift to P = 140 + 0.0005Q^S. Derive the resulting new equilibrium levels of price and quantity. Show in a diagram this new equilibrium along with the initial equilibrium location. Are Apple shareholders pleased by this outcome? Briefly explain why or why not.