Suppose that the market demand for pretzel is Qd=300-20Pand the market supply for pretzel is Qs=20P-100 where P=market price for a pretzel.You must show your work on paper and upload it.

1. Calculate the equilibrium price and quantity

2. In a graph, show what would happen to the equilibrium price and quantity of pretzels if the manufacturers of pretzels receive a subsidy from the U.S Government.

3. Suppose the price of potato chip, a substitute for the pretzel, doubles.Will the demand for pretzels:a. decline by 50%b. double?Justify your answer