Consider the market for orange juice. In this market, the supply curve is given by Q_S = 100P_J −20P_O and the demand curve is given by Q_D = 1000−150P_J +100P_C, where J denotes orange juice, O denotes Orange, and C denotes coffee.

• Assume that P_O = 10 and P_c = 8. Calculate the equilibrium price and quantity in the Orange juice market. (1 mark)
• Suppose that a poor harvest season raises the price of oranges to P_o = 15

1. Is it possible to reach a market equilibrium if the price of orange juice P_J remains unchanged? Why? How much quantity of orange juice will finally be exchanged on the market? (2 marks)
2. Find the market price necessary to restore equilibrium. Deduce the equilibrium quantity of orange juice. (2 marks)

• Draw a graph to illustrate your answers. (1 mark)