Use the following to answer questions: Table: Equilibrium Adjustment $$\begin{array} { c c c }
\hline \text { Price } & \text { Quantity Demanded } & \text { Quantity Supplied } \
\hline \$ 10 & 100 & 160 \
8 & 120 & 145 \
6 & 130 & 130 \
4 & 140 & 115 \
2 & 150 & 100 \
\hline
\end{array}$$
-(Table: Equilibrium Adjustment) Refer to the table. If the price in the free market is $8, then a:
A) surplus of 25 units would exist, and price would tend to fall.
B) surplus of 25 units would exist, and price would tend to rise.
C) shortage of 25 units would exist, and price would tend to rise.
D) shortage of 25 units would exist, and price would tend to fall.

Question

Use the following to answer questions: Table: Equilibrium Adjustment $$\begin{array} { c c c } 
\hline \text { Price } & \text { Quantity Demanded } & \text { Quantity Supplied } \
\hline \$ 10 & 100 & 160 \
8 & 120 & 145 \
6 & 130 & 130 \
4 & 140 & 115 \
2 & 150 & 100 \
\hline
\end{array}$$
-(Table: Equilibrium Adjustment) Refer to the table. If the price in the free market is $8, then a:
A) surplus of 25 units would exist, and price would tend to fall.
B) surplus of 25 units would exist, and price would tend to rise.
C) shortage of 25 units would exist, and price would tend to rise.
D) shortage of 25 units would exist, and price would tend to fall.

Quizplus · Accepted Answer

At a price of $8, quantity demanded is 120 units and quantity supplied is 145 units. Therefore, there is a surplus of 25 units (145 - 120 = 25). A surplus means that the quantity supplied is greater than the quantity demanded, which will cause the price to fall until the market reaches equilibrium.

Use the Following to Answer Questions: Table: Equilibrium Adjustment -(Table: Equilibrium Adjustment) Refer to the Table