Suppose, as in this question, the market we are interested in
can be expressed by the demand equation **Q _{D} = 40 - 2P** and the supply equation

As we know, market forces move markets toward equilibrium price and quantity; meaning, if we can determine what the eventual equilibrium for this market will be, we will know in which direction it will move from an initial price of $5.

In order to determine the equilibrium price and quantity, we simply set supply and demand equal and find the price, P, that solves that equation.

** 40 - 2P = 5 + 3P
**

** 35 = 5P
**

** P* = 7
**

Therefore, the equilibrium price will eventually be $7. This means that the price will rise from $5. As the price rises, the quantity demanded
must be falling.

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