Assume the Following Information About the Demand and Supply Curves

question 224

Multiple Choice

Assume the following information about the demand and supply curves for good Z: $$\begin{array} { c c c c } \text { Price } & \begin{array} { c } \text { Demand Quantity } \\\text { Demanded }\end{array} & \text { Price } & \begin{array} { c } \text { Supply Quantity } \\\text { Supplied }\end{array} \\\$ 10 & 10 & \$ 1 & 10 \\\$ 9 & 20 & \$ 2 & 15 \\\$ 8 & 30 & \$ 3 & 20 \\\$ 7 & 40 & \$ 4 & 25 \\\$ 6 & 50 & \$ 5 & 30 \\\$ 5 & 60 & \$ 6 & 35 \\\$ 4 & 70 & \$ 7 & 40 \\\$ 3 & 80 & \$ 9 & 45 \\\$ 2 & 90 & \$ 10 & 50 \\\$ 1 & 100 & \$ 5 & 55\end{array}$$ From the information given above,

• A)If the price was $9, would there be a shortage of 5 units.
• B)If the price was $9, would there be a surplus of 30 units.
• C)If the price was $3, would there be a shortage of 35 units.
• D)If the price was $4, would there be a surplus of 45 units.
• E)None of the above.

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Definitions:

Markup

The amount added to the cost price of goods to cover overhead and profit.

Selling Expenses

Costs incurred directly from the sale of goods or services, including advertising, sales commissions, and the salaries of sales staff.

Total Manufacturing Costs

The complete sum of all expenses directly involved in the production of a product, including direct materials, direct labor, and manufacturing overhead.

Markup

Markup refers to the difference between the selling price of a good or service and its cost, expressed as a percentage over the cost. It is used to cover expenses and generate profit.