The demand and supply schedules for pop in Chicago 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

9 0 180

a. Determine themarket equilibriumprice 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, theprice ceilingincreases to $8. What is the new market price and quantity sold? Is thisprice ceilingbinding? Why or why not?

d. Would aprice floorfor 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 a 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.