The Figure Below Show the Demand and Supply Functions for a Product

question 227

Multiple Choice

The figure below show the demand and supply functions for a product. Decide which line shows the supply function and which line the demand function. ​ ​
Will a price above the equilibrium price result in a market surplus or shortage?
​

• A)shortage
• B)surplus

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Definitions:

Inelastic Demand

A situation where the demand for a product changes very little when its price changes, indicating that consumers still purchase the product at nearly the same rate regardless of price fluctuations.

Tax Revenue

Tax revenue refers to the income that is gained by governments through taxation, used to fund public services and government spending.

Per-apple Tax

A tax imposed on each unit of apple sold, typically used as an example to explain tax effects on goods.

Imported Apples

Apples imported into a country from overseas for the purpose of being sold.