Final answer:
At a price of $1.20, which is below the equilibrium price of $1.40, there would be a shortage because the quantity demanded would exceed the quantity supplied.
Step-by-step explanation:
If the price is $1.20 and the quantity is 300 at the point of intersection, this indicates a situation of disequilibrium in the market. According to the information provided, the equilibrium price is $1.40 with an equilibrium quantity of 600, where the quantity demanded is equal to the quantity supplied. Therefore, at a price of $1.20, which is below the equilibrium price, the quantity demanded would exceed the quantity supplied, resulting in a shortage.
To determine the exact size of the shortage, you would need to know the specific quantities demanded and supplied at the price of $1.20. Since this information is not provided, we can't calculate the magnitude of the shortage. Nevertheless, based on the given information, we can confidently state that a shortage would exist at that price level.