In a Small Country, the Demand and Supply of Kidneys

question 103

Multiple Choice

In a small country, the demand and supply of kidneys are represented by Q^D = 10,000 - 0.25P and Q^S = 0.5P + 4,000. Which of the following statements is (are) TRUE?
I. The equilibrium price is $8,000.
II. At a price ceiling of $0, there are 4,000 volunteer donors.
III. At a price ceiling of $0, there is an excess demand of 14,000 kidneys.

• A) I, II, and III
• B) II and III (because the demand curve shifts out, pushing up the price)
• C) I and II
• D) III

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