Quantities demanded and supplied at various prices

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

Price (dollars) Demand (millions) Supply (millions)

60 22 14

80 20 16

100 18 18

120 16 20

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?

Reference no: EM131245328

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