Exhibit 3-16

-Refer to Exhibit 3-16.If there are empty seats for a basketball game at the price P*,the situation is best depicted on graph
A) (1), with P* = P1.
B) (2), with P* = P3.
C) (3), with P* = P2.
D) (3), with P* = P3.
E) (4), with P* = P1.

Question

Exhibit 3-16
 
-Refer to Exhibit 3-16.If there are empty seats for a basketball game at the price P*,the situation is best depicted on graph
A) (1), with P* = P1. 
B) (2), with P* = P3. 
C) (3), with P* = P2. 
D) (3), with P* = P3. 
E) (4), with P* = P1.

Quizplus · Accepted Answer

In graph (3), there is a range between P1 and P2 where the quantity demanded is greater than the quantity supplied, meaning there are empty seats. Therefore, if the price is set at P*, within this range, there will be empty seats. Setting the price at P2 or above would result in a surplus of supply, while setting it below P1 would result in a shortage of supply. Therefore, the best choice is to set the price at P2, where there is an appropriate balance between supply and demand, and any empty seats are minimized.

Exhibit 3-16 -Refer to Exhibit 3-16.If There Are Empty Seats for a Empty