The Table Below Displays Hypothetical Demand and Supply Schedules for the Market

question 81

Multiple Choice

The table below displays hypothetical demand and supply schedules for the market for overnight parcel deliveries in Canada. $$\begin{array}{l}\begin{array} { | l | l | l | l | l | l | } \hline & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (millions) }\end{array} & && \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (millions) }\end{array} & \\\hline \text { Price (\$) } & \text { Year 1 } & \text { Year 2 } & & \text { Year 1 } & \text { Year 2 } \\\hline & & & & \\\hline 30 & 80 & 95 && 140 & 125 \\\hline 26 & 90 & 105 & &135 & 120 \\\hline 22 & 100 & 115 && 130 & 115 \\\hline 18 & 110 & 125 & &125 & 110 \\\hline 14 & 120 & 135 && 120 & 105 \\\hline 10 & 130 & 145 & &115 & 100 \\\hline\end{array}\\\text { TABLE 3- } 3\end{array}$$
-Refer to Table 3- 3. Suppose the price of overnight parcel delivery in Year 1 is $22. Which of the following statements is correct? In Year 1

• A) 115 million parcels will be delivered.
• B) there is an excess demand of 30 million deliveries.
• C) there is an excess supply of 30 million deliveries.
• D) there is an excess demand of 15 million deliveries.
• E) there is an excess supply of 15 million deliveries.

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Definitions:

Credence Properties

Characteristics of a product or service that are difficult or impossible for consumers to evaluate even after purchase and use, such as the expertise of a medical procedure.

Experience Properties

Characteristics of a product or service that can only be ascertained through direct use or experience.

Search Properties

Characteristics of a product or service that can be easily evaluated before purchase, such as color, style, or price.

Tangible Products

Physical items or goods that can be seen, touched, and owned, unlike services which are intangible.