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The market for burritos in a college town is shown to the right. At price of $7, how much excess demand is there? A. 0; there is excess supply at $7. B. 20 units O C. 30 units OD. 10 units

The market for burritos in a college town is shown to the right. At price of $7, how much excess demand is there? A. 0; there is excess supply at $7. B. 20 units O C. 30 units OD. 10 units

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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**The market for burritos in a college town is shown to the right. At a price of $7, how much excess demand is there?** **Answer Options:** - A. 0; there is excess supply at $7. - B. 20 units - C. 30 units - D. 10 units **Graph Explanation:** The graph displays the supply and demand curves for burritos in a college town. - The blue line (denoted as D) represents the demand curve. - The red line (denoted as S) represents the supply curve. The x-axis shows the Quantity of burritos, ranging from 0 to 160 units. The y-axis shows the Price of burritos in dollars, ranging from $0 to $16. Key points on the graph: - A dotted vertical line at 40 units intersects the demand curve at $10 and the supply curve just slightly above $5. - A dotted vertical line at 60 units intersects both the demand and supply curves at approximately $7 and $8 respectively. - At $7 on the price axis, the quantity demanded is about 60 units while the quantity supplied is about 40 units. This shows an excess demand of (60 units - 40 units) = 20 units at the price of $7. The correct answer is: - B. 20 units
Transcribed Image Text:**The market for burritos in a college town is shown to the right. At a price of $7, how much excess demand is there?** **Answer Options:** - A. 0; there is excess supply at $7. - B. 20 units - C. 30 units - D. 10 units **Graph Explanation:** The graph displays the supply and demand curves for burritos in a college town. - The blue line (denoted as D) represents the demand curve. - The red line (denoted as S) represents the supply curve. The x-axis shows the Quantity of burritos, ranging from 0 to 160 units. The y-axis shows the Price of burritos in dollars, ranging from $0 to $16. Key points on the graph: - A dotted vertical line at 40 units intersects the demand curve at $10 and the supply curve just slightly above $5. - A dotted vertical line at 60 units intersects both the demand and supply curves at approximately $7 and $8 respectively. - At $7 on the price axis, the quantity demanded is about 60 units while the quantity supplied is about 40 units. This shows an excess demand of (60 units - 40 units) = 20 units at the price of $7. The correct answer is: - B. 20 units
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