Exhibit 3-16 Supply and demand curves for chairs 
In Exhibit 3-16, assume that the market price of chairs is $5 each. This price is:
A) an equilibrium price.
B) not an equilibrium price, since there is an excess supply at a price of $5.
C) not an equilibrium price, since there is an excess demand at a price of $5.
D) not an equilibrium price, since the rate at which chairs are being supplied is great than the rate at which they are being demanded.
Correct Answer:
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