Can u answer all

QUESTION 2

The following schedule sets out the demand and supply schedules for milk.

Price (RM/carton)	Market Demand (Cartons per day)	Market Supply (Cartons per day)
1.00	200	110
1.25	175	130
1.50	150	150
1.75	125	170
2.00	100	190

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

(2 marks)

2. Plot the market demand and supply curve for milk. (According to the right scale.)

(6 marks)

3. Suppose the government is imposing a price control of RM1 on the carton of milk.

1. What is this legal price called?

2. How much will the shortage or surplus be?

(2 marks)

4. Calculate the price elasticity of demand for milk, if the price of milk increases from RM 1.25 to RM 2.00 and indicate whether the demand is elastic or inelastic?

(2 marks)

5. If milk becomes more popular and better feeds increase milk production, describe how the equilibrium price and quantity of mill will change

(3 marks)

6. Illustrate the demand curve if

• Government announces the price of the milk will increase in future.
• The research shows that drinking milk can make people live longer

(2.5 marks)

7. Illustrate the supply curve if

• Government announces the price of the milk will increase in future.
• There is an increase in the number of milk suppliers.