A low-income country decides to set a price ceiling on bread so it can make sure that bread is affordable to the poor. T

[answerhappygod]

A low-income country decides to set a price ceiling on bread so
it can make sure that bread is affordable to the
poor. The conditions of demand and supply are given in the Table
below.
Price QD QS
$1.60 9,000 5,000
$2.00 8,500 5,500
$2.40 8,000 6,400
$2.80 7,500 7,500
$3.20 7,000 9,000
$3.60 6,500 11,000
$4.00 6,000 15,000

a) What are the equilibrium price and equilibrium quantity
before the price ceiling? [3 marks]

b) Calculate the price elasticity of demand when the price
changes from $2.8 to $3.20. [6 marks]

c) Calculate the price elasticity of supply when the price
changes from $2.8 to $3.20. [6 marks]

d) What will the excess demand or the shortage be if the
price ceiling is set at $2.40? At $2.00? At $3.60?
[9 marks]
e) Do you think the price ceiling will benefit the poor? Why
or why not? [6 marks]