Background:

In 2019, North Carolina consumed 114,576 thousand barrels of gasoline which is about 4.8 billion gallons.Gasoline demand and supply are both quite inelastic, which means that they don't respond much to changes in prices.Short-run demand elasticities have been estimated around -0.2.This means that if the price of gasoline increases by 10%, consumption of gasoline decreases by 2%.Supply elasticities are estimated around 0.1 which means that if the price of gasoline increases by 10%, the supply of gasoline increases by 1%.The supply and demand curves below are roughly consistent with these facts.

Let annual demand for gasoline in North Carolina be given by D(p)= 6-0.5p where demand is measured in billions of gallons and is the price in $ per gallon.Let annual supply in North Carolina be given by S(p)= 4.2+ 0.4p , where supply is also in billions of gallons.

3} Market equilibrium a. Solve for the market equilibrium gasoline price and annual quantity. Using P each of three methods. i. desmos.con1: graph both lines and nd their intersection. ii. wwwwolframalphacom: type \"at; = 6 0.510, q = 4.2 + 0.41)\" and hit enter. Note that the equations are separated by a comma. iii. Algebra. Set suppljs.r equal to demand to solve for 39. Then use that to solve for the quantity. (Hint: Wolfram Alpha will show you how if you need help} At the market equilibrium price, how much do consumers spend (expenditures) and how much revenue to gasoline stations receive. Ifthe price is $3, is there are surplus or shortage? How big is it? [Ethe price is $1.50, is there are surplus or shortage? How big is it