Final answer:
Without specific quantities, it is not possible to accurately determine the surplus at a price of $60. It is inferred that a surplus would exist because the price is significantly above the equilibrium, which is $1.40.
Step-by-step explanation:
The question concerns the economic principles of supply and demand and how they create market equilibrium. In the scenario provided, if a price of $60 is set in the market, and assuming that this price is above the equilibrium price (as the equilibrium price is $1.40), the quantity demanded would be less than the quantity supplied leading to a surplus. However, without the specific quantities demanded and supplied at the price of $60, it is not possible to determine the extent of the surplus accurately. Based on the information from Chapter 3, we know that at a price above equilibrium, such as $1.60, which has lower Qd (quantity demanded) and higher Qs (quantity supplied), we see a surplus in the market. We can infer that at $60, well above $1.60, the surplus would be accordingly higher than the surplus at $1.60, which is 90 gallons.