1.3. Suppose that the quantity demanded and quantity supplied in the market for milk is as follows:

Price per Gallon

$5

$4

$3

$2

$1 Quantity Demanded 1000 2000 3500 4100 6000 Quantity Supplied 5000 4500 3500 2000 1000

a. What is the equilibrium price and quantity of milk?

b. If the government place a price ceiling of

$2 on milk, will there be a shortage or ur plus of milk? How large will it be? How many gallons of milk will be sold?