The graph shown depicts the market for a good. At a price of $18, there is:
A) a shortage (excess demand) of 9,000 units.
B) a shortage (excess demand) of 5,000 units.
C) a shortage (excess demand) of 4,000 units.
D) a surplus (excess supply) of 5,000 units.

Question

The graph shown depicts the market for a good. At a price of $18, there is:
A) a shortage (excess demand) of 9,000 units. 
B) a shortage (excess demand) of 5,000 units. 
C) a shortage (excess demand) of 4,000 units. 
D) a surplus (excess supply) of 5,000 units.

Quizplus · Accepted Answer

At a price of $18, the quantity demanded is 10,000 units while the quantity supplied is only 5,000 units, leading to a shortage (excess demand) of 5,000 units. Choice A and C are incorrect because they both indicate larger shortages than what the graph shows. Choice D is incorrect because there is clearly a shortage shown on the graph, not a surplus.

The Graph Shown Depicts the Market for a Good