With each price increase of $20.the quantity demanded decreases by 2. Therefore, (g)品1 At P=80,quantity demanded equals 20 and E,=(80)0.0=-040, Similarly,at P=100,quantity demanded equals 18 and 6-(0=06 Calculate the price elasticity of supply when the price is $80 and when the price is $100. The elasticity of supply is given by: △Qs p△Q P With of quantity supplied increase by2. Therefore, (9)-号=1 At P=80.quantity supplied equals 16 and =(o0=05 Similarly,at P=100,quantity supplied equals 18 and 点-（得0）=06 What are the equilibrium price and quantity? ntity equals the e quantity demar the equilibrium price is$100 and the equilibrium quantity is 18 million. d. Suppose the government sets a price ceiling of $80.Will there be a shortage,and ifso,how large will it be? E Q Q P P P Q Q P D D D D D = =     . With each price increase of $20, the quantity demanded decreases by 2. Therefore, QD P     = −2 20 = −0.1. At P = 80, quantity demanded equals 20 and ED = 80 20     (−0.1) = −0.40. Similarly, at P = 100, quantity demanded equals 18 and ED = 100 18     (−0.1) = −0.56. b. Calculate the price elasticity of supply when the price is $80 and when the price is $100. The elasticity of supply is given by: E Q Q P P P Q Q P S S S S S = =     . With each price increase of $20, quantity supplied increases by 2. Therefore, QS P     = 2 20 = 0.1. At P = 80, quantity supplied equals 16 and ES = 80 16     (0.1) = 0.5. Similarly, at P = 100, quantity supplied equals 18 and ES = 100 18     (0.1) = 0.56. c. What are the equilibrium price and quantity? The equilibrium price and quantity are found where the quantity supplied equals the quantity demanded at the same price. As we see from the table, the equilibrium price is $100 and the equilibrium quantity is 18 million. d. Suppose the government sets a price ceiling of $80. Will there be a shortage, and if so, how large will it be?