It is known that the demand for

clothing in the market where company 'XO' competes is given by the

following function: P = 100 - 2Qd, while the supply is given by Qs = 2P -

6S + 50. Where P represents the market

price of each garment, Qs is the amount offered and Qd the amount

demanded, both expressed in thousands of units, while S represents the

hourly wage worked in the textile sector.

Taking into account the previous information, answer the following question:

a) Determine the equilibrium price and quantity in the clothing market, if the hourly wage is equal to 5 euros. (15 points)

b) If the hourly wage goes down to 3 euros, determine the new equilibrium price and quantity. Compare both equilibria, before and after the change in hourly wage. Explain what happens to the demand and supply curve when wages decrease. (15 points)