Table 7-3
Market supply and demand for good X

-Refer to Table 7-3. At a price of $4.00, total surplus would be:
A) more than it would be at the equilibrium price
B) less than it would be at the equilibrium price
C) the same as it would be at the equilibrium price
D) there is insufficient information to say

Question

Table 7-3
Market supply and demand for good X
 
-Refer to Table 7-3. At a price of $4.00, total surplus would be:
A) more than it would be at the equilibrium price 
B) less than it would be at the equilibrium price 
C) the same as it would be at the equilibrium price 
D) there is insufficient information to say

Quizplus · Accepted Answer

At a price of $4.00, the quantity supplied is 60 and the quantity demanded is 40, which creates a surplus of 20 units. Since the price is above the equilibrium price, there is excess supply and some producers would be willing to sell at a lower price. Therefore, total surplus would be less than it would be at the equilibrium price.

Table 7-3 Market Supply and Demand for Good X