Question

What sort of situation would be created if the price were $20, a surplus or a shortage of books? Exactly how much of a weekly surplus or shortage?

Answer 1

If books were priced at $20, a surplus or shortage would depend on the equilibrium price. A price above equilibrium creates a surplus, below it creates a shortage. The exact amount of surplus or shortage requires quantities demanded and supplied at that price.

Step-by-step explanation:

If the price of books is $20, to determine whether a surplus or a shortage would be created, one must consider the equilibrium price level. According to economic principles, if the price of a good is above the equilibrium level, a surplus is predicted, because the high price encourages producers to supply more of the good than consumers are willing to buy. Conversely, if the price is below the equilibrium level, a shortage is predicted, as the low price increases demand while discouraging supply.

In order to quantify the surplus or shortage, we need information on the quantities demanded and supplied at that price level. In general, a surplus occurs when the quantity supplied exceeds the quantity demanded and vice versa for a shortage. For instance, if at $20 the quantity of books demanded is 200 per week and the quantity supplied is 300 per week, there will be a weekly surplus of 100 books.

The concept of equilibrium price is crucial here; it is the price at which the quantity demanded by buyers equals the quantity supplied by sellers, leading to no surplus or shortage. Without knowing the quantities demanded and supplied at $20, it's impossible to specify the exact surplus or shortage amount.

The compelete question is; What sort of situation would be created if the price were $20, a surplus or a shortage of books? Exactly how much of a weekly surplus or shortage? is:

Answer 2

If books are priced at $20, the resulting situation of a surplus or shortage depends on whether this price is above or below the equilibrium price. A surplus occurs if the price is higher than equilibrium, leading to excess supply. A shortage occurs if the price is lower than equilibrium, leading to excess demand.

Step-by-step explanation:

If the price of books is set at $20, we need to determine whether this price results in a surplus or a shortage.

To make this assessment, we must refer to the concepts of supply and demand and the equilibrium price.

Equilibrium price is when the quantity of books demanded by buyers equals the quantity of books suppliers are willing to sell, with no leftover excess or unmet demand.

In the case where the price is $20, without specific data on supply and demand schedules, we can reference economic principles to predict the market outcome.

Generally, if $20 is above the equilibrium price, suppliers are willing to produce and sell more books than buyers are willing to purchase at that price, leading to a surplus.

Conversely, if $20 is below the equilibrium price, there would be more buyers willing to purchase books than there are books available, resulting in a shortage.

Surplus occurs when the actual price is higher than the equilibrium price, leading to a greater quantity supplied than demanded.

Shortage occurs when the actual price is lower than equilibrium, resulting in a greater quantity demanded than supplied.

The magnitude of the surplus or shortage would depend on how far the price is from the equilibrium and the responsiveness of supply and demand to price changes.