The Table Given Below Shows the Quantity Supplied and the Quantity

question 110

Multiple Choice

The table given below shows the quantity supplied and the quantity demanded for a good at different prices.If the market price of the good is $1.20,there will be a _____.
$$\begin{array}{l}\text { Table } 4.1\\\begin{array} { | r | r | r | } \hline { \text { Price(\$) } } & { \begin{array} { l } \text { Quantity } \\\text { demanded }\end{array} } & { \begin{array} { l } \text { Quantity } \\\text { supplied }\end{array} } \\\hline 1 & 100 & 10 \\\hline 1.2 & 90 & 30 \\\hline 1.4 & 80 & 50 \\\hline 1.5 & 70 & 70 \\\hline 1.6 & 60 & 90 \\\hline\end{array}\end{array}$$

• A)shortage of 30 units
• B)surplus of 30 units
• C)shortage of 60 units
• D)surplus of 60 units
• E)surplus of 20 units

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Definitions:

Price Elasticity

An assessment of demand's elasticity regarding the pricing changes of a specific product.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices, holding all else constant.

Cost Function

An equation that calculates the total cost incurred by a company to produce a specific quantity of a good or service.

Long-run Equilibrium

A market condition where all factors of production and inputs can be varied, allowing firms to enter or exit the market, ultimately resulting in no economic profit for any firm.