If the price were to be $65, then this market is experiencing an excess supply, 20 units excess supply; 30 units excess demand, 20 units excess demand; 30 units in the amount of
If the price were to be $65, then this market is experiencing an excess supply, 20 units excess supply; 30 units excess demand, 20 units excess demand; 30 units in the amount of
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:**Market for Laptop Chargers: Supply and Demand Analysis**
In the graph depicting the market for laptop chargers, we analyze the relationship between price and quantity for both supply and demand.
- **Vertical Axis (Price):** This axis ranges from $0 to $90.
- **Horizontal Axis (Quantity):** This axis represents quantity, ranging from 0 to 80 units.
**Demand Curve (Blue):** This line slopes downward from the left to the right, indicating that as the price decreases, the quantity demanded increases.
**Supply Curve (Orange):** This line slopes upward from the left to the right, showing that as the price increases, the quantity supplied also increases.
**Equilibrium Point:** The intersection of the demand and supply curves occurs at a price of $50 and a quantity of 40 units.
**Scenario Analysis:**
If the price were to be $65:
- At this price, the supply curve indicates a quantity of 60 units.
- The demand curve at this price indicates a quantity of 40 units.
As a result, the market is experiencing an **excess supply** (surplus) of 20 units at the price of $65.
**Multiple Choice Question:**
If the price were to be $65, then this market is experiencing an ___ in the amount of:
- O excess supply; 20 units
- O excess supply; 30 units
- O excess demand; 20 units
- O excess demand; 30 units
*Correct Answer: excess supply; 20 units*
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