price ceiling is set below the equilibrium, it will cause the quantity demanded on the demand curve to be

greater than the quantity supplied on the supply curve, leading to excess demand.

Chapter 5

1. From point B to point C, price rises from $70 to $80, and Qd decreases from 2,800 to 2,600. So:

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543

The demand curve is inelastic in this area; that is, its elasticity value is less than one.

Answer from Point D to point E:

The demand curve is inelastic in this area; that is, its elasticity value is less than one.

Answer from Point G to point H:

The demand curve is elastic in this interval.

2. From point J to point K, price rises from $8 to $9, and quantity rises from 50 to 70. So:

The supply curve is elastic in this area; that is, its elasticity value is greater than one.

From point L to point M, the price rises from $10 to $11, while the Qs rises from 80 to 88:
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The supply curve has unitary elasticity in this area.
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