Part 2 - Supply and Demand Problem 1 Consider a generic supply and demand model where Qo = 100 5P and Qs = P 8. Price is in dollars per unit and Q is in units. What is the Q-axis intercept of Demand? What are the P-axis intercepts of Demand and Supply? 2. According to the model, which side of the market is more price sensitive, demand or supply? How do you know? 3. What do economists mean by \"equilibrium price\" and "equilibrium quantity\"? What are the equilibrium price and equilibrium quantity in this model? 4. In a graph where you measure price along the vertical axis and quantity along the horizontal axis, draw the demand and the supply curves. Clearly mark the P-axis intercepts of the two curves and the Q-axis intercept of demand. 5. In your graph, clearly mark the equilibrium price and the equilibrium quantity. Suppose that the government enforces a price cap. In other words, the government does not allow market participants to trade at any price above 12 dollars. 6. 6. Would there be an excess demand or an excess supply? Of how many units? lllustrate in your graph. Suppose that a demand side shock shifts the demand curve to the right by 60 units at every price. Everything else remains the same. 7. s this a positive or a negative demand side shock? 8. By how many dollars does the equilibrium price change? And the equilibrium quantity? Illustrate in a graph