Use the Following to Answer Questions

question 55

Multiple Choice

Use the following to answer questions:
Figure: Price and Quantity 1
-(Figure: Price and Quantity 1) In the diagram, at a price of $40, the quantity demanded is ______, the quantity supplied is ______, and there is a ______.

• A) 40; 60; surplus of 20 units
• B) 80; 20; shortage of 60 units
• C) 60; 40; shortage of 20 units
• D) 20; 60; surplus of 40 units

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Definitions:

Demand Is Inelastic

A situation where the quantity demanded of a product changes very little in response to changes in its price.

Total Revenue

The overall amount of money generated from the sale of goods or services before subtracting any expenses.

Determinants Of Elasticity

Factors that influence the sensitivity of the quantity demanded or supplied of a good to price changes.

Availability Of Substitutes

The extent to which similar or alternative products and services are accessible to consumers, influencing their choices and market demand.