Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Price Quantity Demanded Quantity Supplied $10 10 60 8 20 45 6 30 30 4 40 15 2 50 0 If the price were $8, a _____
| Price | Quantity Demanded | Quantity Supplied |
|---|---|---|
| $10 | 10 | 60 |
| 8 | 20 | 45 |
| 6 | 30 | 30 |
| 4 | 40 | 15 |
| 2 | 50 | 0 |
If the price were $8, a _____.
a. surplus of 50 units would exist and price would tend to fall
b. surplus of 10 units would exist and price would tend to fall
c. surplus of 25 units would exist and price would tend to fall
d. shortage of 25 units would exist and price would tend to rise
Expert Solution
- The correct answer is c. surplus of 25 units would exist and price would tend to fall.
When the price is $8, the quantity demanded is 20 units and the quantity supplied is 45 units. Since the quantity demanded is less than the quantity supplied, the market is experiencing an excess supply or surplus.
Surplus=45−20
Surplus=25
The surplus is 25 units. It is a disequilibrium and the market will try to change prices to achieve equilibrium. At equilibrium, the price is $6. Therefore, the market will decrease its price from $8 to $6 to achieve equilibrium.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
