Refer to Figure 2.3.At a price of $10 per CD,there would be:
A) excess supply of 70 thousand CDs.
B) excess demand of 50 thousand CDs.
C) excess supply of 50 thousand CDs.
D) excess demand of 70 thousand CDs.

Question

Refer to Figure 2.3.At a price of $10 per CD,there would be: 
A) excess supply of 70 thousand CDs. 
B) excess demand of 50 thousand CDs. 
C) excess supply of 50 thousand CDs. 
D) excess demand of 70 thousand CDs.

Quizplus · Accepted Answer

At a price of $10 per CD, the quantity demanded is 330 thousand CDs, whereas the quantity supplied is only 260 thousand CDs. Therefore, there is an excess demand of 70 thousand CDs (330,000 - 260,000 = 70,000).