Figure 4.3
-Figure 4.3 illustrates the supply and demand for blue jeans. If the actual price of blue jeans is $50, we would expect the price of blue jeans to_______ , the quantity demanded of blue jeans to _______, and the quantity supplied of blue jeans to _______.

Question

Quizplus · Accepted Answer

At a price of $50, we can see from the graph that the market is in a state of equilibrium, where the quantity demanded and quantity supplied are equal. However, if the actual price is $50, it is higher than the equilibrium price, leading to a surplus of blue jeans. To eliminate the surplus, prices will have to fall, hence the price will decrease. At a lower price, we can see from the graph that the quantity demanded will increase, and quantity supplied will decrease, which matches answer choice A.

Figure 4.3 -Figure 4.3 Illustrates the Supply and Demand for Blue Jeans