Figure 3-5
-Refer to Figure 3-5.At a price of $0
A)there is a surplus of 8 units.
B)there is a surplus of 0 units.
C)there is a shortage of 0 units.
D)there is a shortage of 8 units.

Question

Figure 3-5 
-Refer to Figure 3-5.At a price of $0
A)there is a surplus of 8 units. 
B)there is a surplus of 0 units. 
C)there is a shortage of 0 units. 
D)there is a shortage of 8 units.

Quizplus · Accepted Answer

At a price of $0, the quantity demanded is 12 units, while the quantity supplied is only 4 units. This creates a shortage of 8 units (12-4=8), meaning that there are not enough goods available to meet the demand. Thus, the correct choice is D.

Figure 3-5 -Refer to Figure 3-5.At a Price of $0