The table shown depicts the demand and supply schedules of a good. At a price of $0.50, quantity demanded:
A) exceeds quantity supplied, and a shortage (excess demand) exists.
B) is less than quantity supplied, and a shortage (excess demand) exists.
C) exceeds quantity supplied, and a surplus (excess supply) exists.
D) is less than quantity supplied, and a surplus (excess supply) exists.

Question

The table shown depicts the demand and supply schedules of a good. At a price of $0.50, quantity demanded:
A) exceeds quantity supplied, and a shortage (excess demand) exists. 
B) is less than quantity supplied, and a shortage (excess demand) exists. 
C) exceeds quantity supplied, and a surplus (excess supply) exists. 
D) is less than quantity supplied, and a surplus (excess supply) exists.

Quizplus · Accepted Answer

At a price of $0.50, the quantity demanded is 20 units, while the quantity supplied is only 10 units. This means that there is excess demand or a shortage of 10 units. Therefore, choice A is the correct answer.

The Table Shown Depicts the Demand and Supply Schedules of a Good