Figure 3.6

-Refer to Figure 3.6. The figure above represents the market for canvas tote bags. Assume that the price of tote bags is $15. At this price:
A)the quantity demanded exceeds the quantity supplied of tote bags by 75. The price will eventually rise to $25, where quantity demanded will equal quantity supplied.
B)the demand exceeds the supply of tote bags by 55.
C)there is a shortage, equal to 55 tote bags, that will be eliminated when the price rises to $25.
D)there is a shortage equal to 55 tote bags; the price of tote bags will rise until demand is equal to supply.

Question

Figure 3.6
 
-Refer to Figure 3.6. The figure above represents the market for canvas tote bags. Assume that the price of tote bags is $15. At this price:
A)the quantity demanded exceeds the quantity supplied of tote bags by 75. The price will eventually rise to $25, where quantity demanded will equal quantity supplied. 
B)the demand exceeds the supply of tote bags by 55. 
C)there is a shortage, equal to 55 tote bags, that will be eliminated when the price rises to $25. 
D)there is a shortage equal to 55 tote bags; the price of tote bags will rise until demand is equal to supply.

Quizplus · Accepted Answer

At a price of $15, the quantity demanded of tote bags (175 units) exceeds the quantity supplied (120 units) by 55 units. This leads to a shortage of tote bags in the market. The shortage will motivate some buyers to offer a higher price for the product, driving the price up until the shortage is eliminated. In this case, the shortage of 55 totes will be eliminated when the price rises to $25, where the quantity demanded (120 units) will equal the quantity supplied (120 units).

Figure 3.6 -Refer to Figure 3.6. the Figure Above Represents the Market