The government is asking you to evaluate the impact of a proposed price floor in a market.You do not have information regarding the full supply and demand functions in that market, but at the current market equilibrium, you estimate the price elasticity of supply to be 1 and the price elasticity of demand to be 1/5.The current market price is $20 per unit and the current quantity is 100 units.

a.The government's goal is to change the current market price through use of this price control.Suggest a specific value at which to set the price floor that would have an impact on the market.

b.Predict whether there would be excess demand or excess supply in this market as a result of the price floor suggested in part a.Using the elasticity measurements, estimate the amount of excess demand or excess supply you would expect to see.

c.What will be the resulting quantity traded in this market under the suggested price floor?

Use a general market graph to illustrate the predicted impact on the market in the event the government implements the suggested price floor.label the following:

i. Market equilibrium price and quantity before the floor.

ii. The price floor

iii. Quantity traded in the market after the floor

iv. Excess demand or excess supply resulting from the floor

v. CS, PS and deadweight loss resulting from the floor