What is flexible pricing so important? Consider your approach to handling a shortage and surplus if you were a store manager. Using a recent purchase that you had to make, explain how the law of demand applies. 
Also remember to use keywords such as consumer surplus, equilibrium, factors of production, inputs, Law of demand, normal good, surplus, short gate, price floor, etc 

QD = Quantity Demanded QS = Quantity Supplied P = Price

1. If QD = 390 – 2P AND QS = -60 + 3P, find the equilibrium price and quantity.

2. If price is equal to $100, is there a shortage or a surplus? Please explain your answer.

3. Find the Consumer Surplus and the Producer Surplus at equilibrium.

4. Calculate the Total Surplus. Is it at its maximum?

5. If the price is equal to $87, what happens to the Consumer Surplus and the Producer Surplus?

Suppose that in the market for aluminum rods the demand and supply functions are given by:
Demand Function: QD = 300 – 2.5PSupply Function: QS = 5P - 15
Where P = price per aluminum rod and Q = number of aluminum rods
(a) Find the initial equilibrium price and quantity. Calculate the initial consumer surplus (CS) andproducer surplus (PS).
(b) Suppose the government imposes a price floor on aluminum rods. Aluminum rods must now sell for$50 per unit. Will there be a surplus or a shortage of aluminum rods at the price floor? Calculate theamount of the surplus or shortage.
(c) Calculate the consumer surplus (CS) and producer surplus (PS) after the imposition of the price floor.Calculate the deadweight loss associated with the imposition of the price floor.
(d) Are households better off or worse off after the imposition of the price floor? Are firms better off orworse off after the imposition of the price floor? Use your answers from Parts (a) and (c) to explain youranswer.

1. (Market Equilibrium). Aggregate market supply and demand for good X are the following:

                     Q_d (P)=828-27P

                     Q_s (P)=-184+19P

2. (3 points) Calculate the equilibrium price and quantity

3. (3 points) Does the market demand function follow the law of demand at the equilibrium price? EXPLAIN

4. (3 points) Does the market supply function follow the law of supply at the equilibrium price? EXPLAIN

5. (3 points) Is there a surplus or shortage at the equilibrium price? EXPLAIN

6. (3 points) Calculate the surplus or shortage when the price is $26