On a supply-and-demand diagram,consider a price for which the horizontal distance to the supply curve is shorter than the horizontal distance to the demand curve.There is a __________ at that price and the current price must be __________ the equilibrium price.
A) shortage; above
B) shortage; below
C) surplus; above
D) surplus; below

Question

Quizplus · Accepted Answer

When the horizontal distance to the supply curve is shorter than to the demand curve, it means at that price, the quantity supplied is less than the quantity demanded, indicating a shortage. This situation occurs when the current price is below the equilibrium price, as at the equilibrium price, quantity supplied equals quantity demanded.

On a Supply-And-Demand Diagram,consider a Price for Which the Horizontal