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1. The table below illustrates the demand and supplu schedules for seats on air flights between two cities:
Price. Quatity demanded. Quantity supplied
$200. 2,000. 1,200
$300. 1,800. 1,400
$400. 1,600. 1,600
$500. 1,400. 1,800
$600. 1,200. 2,000
What are the market price and equilibrium quantity in this market? Now suppose that federal authorities limit the number of flights between the two cities to ensure that no more than 1,200 passengers can be flown. Evaluate the effects of this quota if price adjusts. (Hint: What price per flight are the 1,200 passengers willing to pay?
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