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 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. Some consumers will have an incentive to offer to buy tote bags at a higher price.
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 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. Some consumers will have an incentive to offer to buy tote bags at a higher price. 
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 is 105 and the quantity supplied is 50, resulting in a shortage of 55. This shortage will continue until the price rises to a level where quantity supplied equals quantity demanded. Therefore, the price will rise to $25 and the shortage of 55 tote bags will be eliminated. Choice A is incorrect because it assumes that the market will reach the equilibrium price right away, without any adjustment. Choice B is incorrect because it suggests that consumers will offer to buy the remaining tote bags at a higher price, but this is not a sustainable solution in the long run. Choice D is incorrect because it implies that the price will rise indefinitely, which is not necessarily true.

Figure 3-6 -Refer to Figure 3-6.The Figure Above Represents the Market for Represents