Final answer:
To find the equilibrium price and quantity for milk, one must examine the demand and supply schedules and find the price where these two quantities are equal. The example from Figure 3.4 with gasoline demonstrates how equilibrium is determined, but specific schedules for milk are necessary to answer the student's question.
Step-by-step explanation:
The student is asking about determining the equilibrium price and quantity in a market for milk based on given options. In economics, the equilibrium price and quantity in a market are found where the quantity demanded equals the quantity supplied. Referring to Figure 3.4, as an example, we see that the equilibrium price for gasoline is $1.40 per gallon and the equilibrium quantity is 600 million gallons. If the price were to rise above this equilibrium to $1.80, the demand would fall to 500 million gallons, indicating excess supply at this higher price.
To answer the student’s specific question about the equilibrium price and quantity for milk, one would need the actual demand and supply schedules for milk, not gasoline. They would then look for the price at which the quantity demanded of milk equals the quantity supplied, following the principle illustrated with the example of gasoline in Figure 3.4.