The graph shown depicts the market for a good. What state is this market in if the price of the good is $15?
A) There is a shortage (excess demand), signaling that sellers should raise their price.
B) There is a shortage (excess demand), signaling that buyers should leave the market.
C) There is a surplus (excess supply), signaling that sellers should drop their price.
D) There is a surplus (excess supply), signaling that buyers should bid up the price.

Question

The graph shown depicts the market for a good. What state is this market in if the price of the good is $15?
A) There is a shortage (excess demand), signaling that sellers should raise their price. 
B) There is a shortage (excess demand), signaling that buyers should leave the market. 
C) There is a surplus (excess supply), signaling that sellers should drop their price. 
D) There is a surplus (excess supply), signaling that buyers should bid up the price.

Quizplus · Accepted Answer

At a price of $15, the quantity demanded is less than the quantity supplied, meaning there is excess supply or a surplus. This signals to sellers that they should drop their price in order to sell their goods.

The Graph Shown Depicts the Market for a Good