What Is the Amount of the Shortage or Surplus in the Market

question 142

Multiple Choice

What is the amount of the shortage or surplus in the market for public transportation when the price ceiling is $1.75? $$\begin{array}{l}\text { Market for Public Transportation }\\\begin{array} { l c c } \hline \text { Price } & \text { Quantity Demanded } & \text { Quantity Supplied } \\\hline \$ 0.75 & 100,000 & 65,000 \\\$ 1.00 & 92,000 & 80,000 \\\$ 1.25 & 86,000 & 86,000 \\\$ 1.50 & 80,000 & 100,000 \\\$ 1.75 & 75,000 & 115,000 \\\$ 2.00 & 68,000 & 116,000 \\\hline\end{array}\end{array}$$

• A) 100,000
• B) 86,000
• C) 75,000
• D) 40,000
• E) 0 zero)

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Definitions:

Direct Costs

Expenses that can be directly attributed to the production of specific goods or services, such as raw materials and labor.

Cost Object

Any item for which costs are separately measured and assigned, including products, services, projects, or departments.

Product Costs

The total costs involved in manufacturing a product, which include direct materials, direct labor, and manufacturing overhead.

Expensed

A term referring to costs that are immediately charged against revenues as an expense, rather than being capitalized.