A firm faces a demand curve for good Q as Q = 68 -2.1P where P is price. If the firm decides to raise its price from $10 to $12.5, then quantity demanded should fall from to units. 48.50; 42.50 48.50; 41.75 O 47; 41.75 O 47; 42.50 units

A firm faces a demand curve for good Q as Q = 68 -2.1P where P is price. If the firm decides to raise its price from $10 to $12.5, then quantity demanded should fall from to units. 48.50; 42.50 48.50; 41.75 O 47; 41.75 O 47; 42.50 units

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Market Surplus and Shortage Analysis

In everyday language, a “surplus” indicates that there is an excess of something, while a “shortage” means that there is a scarcity of it. In economics, “market surplus” refers to the condition where the quantity of a certain good more available than what is required or “demanded” by the market. In the same way, a “market shortage” refers to the condition where the quantity of a certain good is less available than what is “demanded” by the market. If quantity in demand is written as Qd and quantity that is supplied is written as Qs, then, the condition Qs > Qd indicates market surplus and condition Qd > Qs indicates market shortage.

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