Given the following supply and demand curves for six-packs of beer, a price of $7.00 would produce:
Demand Q = 31,000 - 2000P
Supply Q = 10,000 + 1500P
A) equilibrium.
B) a shortage of 3,500 six-packs of beer.
C) a surplus of 3,500 six-packs of beer.
D) a shortage of 17,000 six-packs of beer.
E) a surplus of 20,500 six-packs of beer.

Question

Quizplus · Accepted Answer

At a price of $7.00, the quantity demanded is calculated by substituting P with 7 in the demand equation: Q = 31,000 - 2000(7) = 17,000. The quantity supplied is calculated by substituting P with 7 in the supply equation: Q = 10,000 + 1500(7) = 20,500. The quantity supplied (20,500) exceeds the quantity demanded (17,000) by 3,500, indicating a surplus of 3,500 six-packs of beer.

Given the Following Supply and Demand Curves for Six-Packs of Beer