The demand for waffle cones is P = 800 -2QDand the supply of waffle cones is P = 200 + QS. The price is expressed in cents. There is currently only one supplier in the industry.

a. (1) Determine the market equilibrium price and quantity of waffle cones.

b. (2) Determine the price elasticity of demand at the market equilibrium. Use the point elasticity formula. Is demand elastic, inelastic or unit elastic at this point?

c. (2) Determine the price elasticity of supply at this point.Use the point elasticity formula. Is supply elastic or inelastic?

d. (3) Suppose that a second firm enters this industry. The firm's supply can be expressed by the same supply equation as the incumbent firm. Determine the new market supply, the equilibrium price and quantity in this market. Explain how the supply curve has changed (increased or decreased).

e. (2) Calculate and explain what happened to the degree of price elasticity of demand at this new equilibrium.