Scenario 2.1:
The demand for books is: Q d = 120 - P
The supply of books is: Q s = 5P
-Refer to Scenario 2.1. If P = $15, which of the following is true?
A) Quantity supplied is greater than quantity demanded.
B) Quantity supplied is less than quantity demanded.
C) Quantity supplied equals quantity demanded.
D) There is a surplus.

Question

Quizplus · Accepted Answer

- To find out the quantity demanded, we need to substitute P = $15 in the demand function: Q_d = 120 - 15 = 105 - To find out the quantity supplied, we need to substitute P = $15 in the supply function: Q_s = 5 × 15 = 75 - As quantity demanded (105) is greater than quantity supplied (75), there is a shortage in the market, meaning quantity supplied is less than quantity demanded. Therefore, the answer is B, Quantity supplied is less than quantity demanded.

Scenario 2.1: The Demand for Books Is: Qd = 120 - P

Scenario 2.1: The Demand for Books Is: Q_d = 120 - P