If the Demand and Supply Functions for Z-Brand Phones Are

question 57

Multiple Choice

If the demand and supply functions for Z-brand phones are and respectively, compare the quantity demanded and the quantity supplied when . Note that q is the quantity produced or sold. Are there surplus phones or not enough to meet demand? ​

• A)There will be a shortage at a price of $22.
• B)There will be a surplus at a price of $22.

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Definitions:

Purely Competitive Industry

An industry characterized by many firms offering identical products where no single firm can influence the market price.

Normal Profit

The minimum level of profit needed for a company to remain competitive in the market, typically considered as the cost of doing business, including opportunity costs.

Quantity Demanded

The amount of a good or service that consumers are willing and able to purchase at a given price over a specified period of time.

Market Price

The current price at which a good or service is bought and sold in a market, determined by the interplay of supply and demand.