Figure 3.6
-Refer to Figure 3.6.The figure above represents the market for canvas tote bags.Compare the conditions in the market when the price is $50 and when the price is $35.Which of the following describes how the market differs at these prices?
A)At each price there is a surplus; the surplus is greater at $35 than at $50.
B)The difference between quantity supplied and quantity demanded is greater at $50 than at $35.
C)At each price there is a surplus; firms will lower the equilibrium price in order to eliminate the surplus.
D)At each price the supply of tote bags exceeds the demand for tote bags.

Question

Figure 3.6 
-Refer to Figure 3.6.The figure above represents the market for canvas tote bags.Compare the conditions in the market when the price is $50 and when the price is $35.Which of the following describes how the market differs at these prices?
A)At each price there is a surplus; the surplus is greater at $35 than at $50. 
B)The difference between quantity supplied and quantity demanded is greater at $50 than at $35. 
C)At each price there is a surplus; firms will lower the equilibrium price in order to eliminate the surplus. 
D)At each price the supply of tote bags exceeds the demand for tote bags.

Quizplus · Accepted Answer

When the price is $50, the quantity demanded is 200 bags and the quantity supplied is 100 bags, resulting in a difference of 100 bags (surplus). When the price is $35, the quantity demanded is 300 bags and the quantity supplied is 200 bags, resulting in a difference of 100 bags (still a surplus). However, the difference (or surplus) is greater at a higher price of $50 compared to $35. Therefore, B is the correct answer.

Figure 3.6 -Refer to Figure 3.6.The Figure Above Represents the Market for the Market