Given the following data on gasoline supply and demand, complete the Market Total row for each table. Quantity demanded (gallons per day) Price per gallon $5.00 $4.00 $3.00 $2.00 $1.00 Al 1 2 3 4 5 Betsy 0 1 1 1 2 Casey 2 2 3 3 4 Daisy 1 3 4 4 6 Eddie 1 2 2 3 5 Market Total Quantity supplied (gallons per day) Price per gallon $5.00 $4.00 $3.00 $2.00 $1.00 Firm A 3 3 2 2 1 Firm B 7 5 3 3 2 Firm C 6 4 3 3 1 Firm D 6 5 3 2 0 Firm E 4 2 2 2 1 Market Total (a) What is the equilibrium price? $ per gallon. (b) How much of a market surplus would exist if the government set a price floor of $4 per gallon? There would be a gallon surplus.

    Answer : For bargain entirety muchness require :

    When appraisement = $5 per gallon ; the muchness require = 1 + 0 + 2 + 1 + 1 = 5.

    When appraisement = $4 per gallon ; the muchness require = 2 + 1 + 2 + 3 + 2 = 10.

    When appraisement = $3 per gallon ; the muchness require = 3 + 1 + 3 + 4 + 2 = 13.

    When appraisement = $2 per gallon; the muchness require = 4 + 1 + 3 + 4 + 3 = 15.

    When appraisement = $1 per gallon ; the muchness require = 5 + 2 + 4 + 6 + 5 = 22.

    For bargain entirety muchness provide :

    When appraisement = $5 per gallon ; the muchness provide = 3 + 7 + 6 + 6 + 4 = 26

    When appraisement = $4 per gallon ; the muchness provide = 3 + 5 + 4 + 5 + 2 = 19

    When appraisement = $3 per gallon ; the muchness provide = 2 + 3 + 3 + 3 + 2 = 13

    When appraisement = $2 per gallon; the muchness provide = 2 + 3 + 3 + 2 + 2 = 12

    When appraisement = $1 per gallon ; the muchness provide = 1 + 2 + 1 + 0 + 1 = 5

    a) At makeweight the bargain require = the bargain provide. From the overhead vigilance it is open that at appraisement equalize $3 per gallon, the entirety bargain require = the entirety bargain provide. Therefore, $3 per gallon is the makeweight appraisement equalize.

    b) In condition of $4 per gallon, the entirety bargain muchness provide = 19 and the entirety bargain muchness require = 10 . Therefore, at $4 per gallon appraisement equalize the bargain faces debauchery provide or bargain surplus of (19 – 10) = 9 gallons.