Consider the markets for butter (B) and margarine (M), where the demand curves are QdM = 20 – 2PM + PB and QdB = 60 – 6PB + 4 PM and the supply curves are QsM = 2PM and QsB = 3PB. a. Find the equilibrium prices and quantities for butter and margarine. b. Suppose that an increase in the price of vegetable oil shifts the supply curve of margarine to QsM = PM. How does this change affect the equilibrium prices and quantities for butter and margarine?

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