-If the market price rises from P₀ to P₂ in the above figure, then there is a
A)surplus equal to the distance Q₀, Q₂.
B)surplus equal to the distance Q₁, Q₂.
C)shortage equal to the distance Q₀, Q₂.
D)shortage equal to the distance Q₁, Q₂.

Question

-If the market price rises from P₀ to P₂ in the above figure, then there is a
A)surplus equal to the distance Q₀, Q₂. 
B)surplus equal to the distance Q₁, Q₂. 
C)shortage equal to the distance Q₀, Q₂. 
D)shortage equal to the distance Q₁, Q₂.

Quizplus · Accepted Answer

When the market price rises from P₀ to P₂, the quantity supplied increases to Q₂, but the quantity demanded decreases to Q₁, creating a surplus equal to the distance Q₁, Q₂.

-If the Market Price Rises from P₀ to P₂ in the Above