7.1 At a price of 50 cents per gallon, there is excess demand of 4,000 gallons per day. Suppose a seller produces an extra gallon of milk (marginal cost 50 cents) and sells it to the buyer who values it most (reservation price $2.50) for $1.50. Both buyer and seller will gain additional economic surplus of $1, and no other buyers or sellers will be hurt by the transaction. LO1