Use the following general linear demand relation to answer questions : where M is income and is the price of a related good, R.
-If M = $15,000 and = $20 and the supply function is , then, when the price of the good is $60,
A) there is a shortage of 60 units of the good.
B) there is equilibrium in the market.
C) there is a surplus of 60 units of the good.
D) the quantities demanded and supplied are indeterminate.
Correct Answer:
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