A low-income country decides to set a price ceiling on bread so it can make sure that bread is affordable to the poor. Table 3.11 provides the conditions of demand and supply. What are the equilibrium price and equilibrium quantity before the price ceiling? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at $2.40? At $2.00? At $3.60?

Table 3.11

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Price $1.60 $2.00 $2.40 $2.80 $3.20 $3.60 $4.00 Qd 9,000 8,500 8,000 7,500 7,000 6,500 6,000 5,000 5,500 6,400 7,500 9,000 Qs 11,000 15,000