BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Price = $700, demand = 300, supply = 500
|
|
|
Price = $500, demand = 500, supply = 300
|
|
|
Price = $600, demand = 400, supply = 400
|
|
|
Price = $400, demand = 600, supply = 200
|
Detailed explanation-1: -Excess supply in a perfectly competitive market is the “extra” amount of supply, beyond the quantity demanded. As an example, suppose the price of a television is $600, the quantity supplied at that price is 1000 televisions, and the quantity demanded is 300 televisions.
Detailed explanation-2: -Excess demand is demand minus supply. Example 1. A baker posts a sale price of $2 per loaf of bread. At this price, he is willing to sell up to 300 loaves of bread (per day), but consumers are willing to buy only 200.
Detailed explanation-3: -At the equilibrium price, quantity demanded equals quantity supplied. At a price of $30, quantity demanded is 35 and quantity supplied is 15, therefore, excess demand is 20.
Detailed explanation-4: -Excess Demand: the quantity demanded is greater than the quantity supplied at the given price. This is also called a shortage. Excess Supply: the quantity demanded is less than the quantity supplied at the given price. This is also called a surplus.