Refer to the diagram. A surplus of 160 units would be encountered if the price was

Question

Quizplus · Accepted Answer

A surplus occurs when the quantity supplied exceeds the quantity demanded at a certain price. In this diagram, the point where quantity supplied and quantity demanded intersect is at a price of $1.00, and at that point, the quantity is 240 units. A surplus of 160 units would mean that the quantity supplied is 400 units (240 + 160). Looking at the diagram, a quantity of 400 units would intersect the supply curve at the price of $1.60, so the answer is B.

Refer to the Diagram