Refer to the figure 3.14. At a quantity demanded of 750, there is an excess of what?
Understand the Problem
The question requires interpreting a supply and demand graph to determine the outcome at a specific quantity demanded. We need to analyze the graph at the demand of 750 sunglasses and identify whether there is an excess of supply or demand at given prices.
Answer
demand of 450 sunglasses if the price is $60
The correct answer is a. demand of 450 sunglasses if the price is $60.
Answer for screen readers
The correct answer is a. demand of 450 sunglasses if the price is $60.
More Information
Excess demand, also known as a shortage, occurs when the quantity demanded is greater than the quantity supplied. Looking at Figure 3.14, at a quantity demanded of 750, the corresponding price on the demand curve (D) is approximately $30. However, at this quantity, the supply curve (S) indicates a price of $60. This $30 difference between what consumers are willing to pay and what suppliers are asking creates excess demand.
Tips
A common mistake is to confuse demand and supply curves. Always double-check which curve you are referencing for a given quantity or price.
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