Multiple Choice
The general linear demand function below is used to answer questions :
where Qd = quantity demanded, P = the price of the good, M = income,
= the price of a good related in consumption.
-If the current price of a good is $10, market demand is , and market supply is , then
A) more of the good is being produced than people want to buy.
B) a lower price will increase the shortage.
C) at the current price there is excess demand, or a shortage, of 150 units.
D) Both b and c
E) All of the above
Correct Answer:
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