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You are an economist for the Vanda-Laye Corporation, which produces and distributes outdoor cooking supplies. The company has come under new ownership and management and will be undergoing changes in its product lines and operating structure. As an economist, your responsibilities include examining the market factors that affect success or failure of a product, including the supply and demand for the product, market conditions, and the behavior of competitors with similar products.
Your supervisor, Jorge, has assigned you the task of evaluating a new product. The new product, oven mittens, has several competitors in the marketplace, but your company will be using a new patented material that provides protection from heat and maintains a great deal of flexibility. The supply and demand functions for oven mittens are as follows:
Qd = 45 - 6.9P
Qs = -15 + 10P
where Qd is the quantity demanded, Qs the quantity supplied, and P the price.
Tasks:
Jorge has asked you to research the market and provide detailed responses to the following questions:
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