1. The demand and supply schedules for pop in Vancouver are as follows:

Price ($/pack of 2 bottles) Quantity demanded (thousands /week)Quantity supplied (thousands/ week)

2 280 0

3 240 30

4 200 60

5 160 90

6 120 120

7 80 140

8 40 160

90 180

a. determine the market equilibrium price and quantity of pop.

b. if a price ceiling is imposed at $4 per pack, is this price ceiling binding? what is the resulting market price, quantity sold and the shortage?

c. as sellers complain about the low price of pop, the price ceiling increases to $8. what is the new market price and quantity sold? is this price ceiling binding? why or why not?

d. would a price floor for pop at $8 be binding? what would be the resulting price, quantity sold, and would there be a surplus or shortage?

e. would a price floor at $8 result in dead weight loss? why or why not? what is a dead weight loss?

f. at a price floor of $8, is marginal cost equal to the marginal benefit at the last unit traded? explain.