Question: Consider a competitive market for which the quantities demanded and supplied (per year) at various prices are given as follows: a. Calculate the price elasticity

Consider a competitive market for which the quantities demanded and supplied (per year) at various prices are given as follows:

a. Calculate the price elasticity of demand when the price is $80 and when the price is $100.
b. Calculate the price elasticity of supply when the price is $80 and when the price is $100.
c. What are the equilibrium price and quantity?
d. Suppose the government sets a price ceiling of $80. Will there be a shortage, and if so, how large will it be?

Price Dollars) Demand (Millions) Supply Millions) 60 80 100 120 20 18 16 14 16 18 20

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