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Table: The Lemonade Market

-(Table: The Lemonade Market) Look at the table The Lemonade Market. If the price of lemonade is $1.25 per cup, we expect to see:
A)a rising price to eliminate the shortage.
B)a rising price to eliminate the surplus.
C)a falling price to eliminate the shortage.
D)a market in equilibrium.

Question

Use the following to answer questions :
Table: The Lemonade Market
 
-(Table: The Lemonade Market) Look at the table The Lemonade Market. If the price of lemonade is $1.25 per cup, we expect to see:
A)a rising price to eliminate the shortage. 
B)a rising price to eliminate the surplus. 
C)a falling price to eliminate the shortage. 
D)a market in equilibrium.

Quizplus · Accepted Answer

According to the table, at a price of $1.25 per cup, the quantity demanded and the quantity supplied are both 200 cups per week. This means there is neither a shortage nor a surplus in the market, indicating that the market is in equilibrium. Therefore, there is no need for the price to rise or fall to eliminate a shortage or a surplus.

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