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

Price per

Gallon

Quantity

Demanded

Quantity

Supplied

$5

1,000

5,000

$4

2,000

4,500

$3

3,500

3,500

$2

4,100

2,000

$1

6,000

1,000

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

If the government places a price ceiling of $2 on milk, will there be a shortage or surplus of milk? How large will it be? How many gallons of milk will be sold?