Suppose the demand and supply for milk is described by the following equations: Q_D = 800-100P; Q_S= -700 + 400P, where P is price in dollars, Q_D is quantity demanded in millions of gallons per year, and Q_S is quantity supplied in millions of gallons per year.Calculate equilibrium quantities and price. (40 Points) Answered. Q= 500 mil gal per yr, P=3

1. If the price in the above market is $4 would the market be in equilibrium, surplus or shortage?If it is in surplus or shortage, how much would the shortage or surplus be?(10 Points)