1. **State the problem:** We want to predict the effect of increased funding for computer education and tax breaks for software firms on the equilibrium price and quantity of software. 2. **Understand the economic model:** The market equilibrium is determined by the intersection of the demand curve ($Q_d$) and the supply curve ($Q_s$). The equilibrium price ($P^*$) and quantity ($Q^*$) satisfy: $$Q_d = Q_s$$ 3. **Effect of increased funding for computer education:** This likely increases consumer knowledge and demand for software, shifting the demand curve to the right (increase in demand). 4. **Effect of tax breaks for software firms:** This reduces production costs, shifting the supply curve to the right (increase in supply). 5. **Combined effect on equilibrium:** Both demand and supply increase, so the new equilibrium quantity $Q^*_1$ will be higher than before. 6. **Effect on equilibrium price:** Since demand and supply both increase, the price effect depends on the relative magnitude of shifts: - If demand increases more than supply, price rises. - If supply increases more than demand, price falls. - If shifts are equal, price remains roughly the same. 7. **Conclusion:** We predict the equilibrium quantity of software will increase. The equilibrium price may increase, decrease, or stay the same depending on the relative shifts, but quantity definitely rises. **Final answer:** - Equilibrium quantity $Q^*$ increases. - Equilibrium price $P^*$ may increase, decrease, or remain unchanged depending on the relative size of demand and supply shifts.