The demand curve and the supply curve for one year discount bonds were estimated using the following equations:

Note: (Bd = Bond Demand, Bs = Bond Supply)

Following the financial crisis the stock market experienced a significant increase in risk and many retirees started moving money out of the stock market and into bonds. This resulted in a parallel shift in the demand for bonds, such that the price of bonds at all quantities increased $50. At the same time, with the contaccting economy, many businesses cut down on capital investments, which resulted in an overall decrease in new bond issuances. As a result, the overall supply of bonds decreased, such that the price of bonds at all quantities increased $100.

a. What is the new equilibrium price and quantity?

b. What is the new market interest rate?