Consider the following demand and supply functions:

Consider the following demand and supply functions:

Demand: Qd = 80 – 4P

Supply: Qs = 50 + 2P

a. Solve for the equilibrium price (Po) and the equilibrium quantity (Qo).

b. Suppose there are complaints that the equilibrium price in this market is unfair and Congress sets a price control of $7.50. Is this a price floor or a price ceiling? Explain why Congress set this price—was the equilibrium price considered too low or too high? Will this price control result in a surplus or a shortage? Of how much?