The Above Figure Shows the Market for T-Shirts

question 45

Multiple Choice

The above figure shows the market for t-shirts. If the price of t-shirts is $12, then

• A) there is a shortage and the price of t-shirts will fall.
• B) there is a surplus and the price of t-shirts will rise.
• C) there is a surplus and the price of t-shirts will fall.
• D) there is a shortage and the price of t-shirts will rise.
• E) the market is in equilibrium.

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Definitions:

Real Output

The total amount of goods and services produced, adjusted for inflation or deflation.

Loanable Funds

The money available for borrowing in the financial markets, determined by the levels of savings and demand for loans.

Rate of Inflation

The rate of inflation is the pace at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Operational Efficiency

The ability of an organization to minimize waste and maximize output with the least input of resources like time, money, and labor.