Final answer:
If the price of a product is $120, we need additional information to determine the quantities demanded and supplied and whether a shortage or surplus exists.
Step-by-step explanation:
If the price of a product is $120, we need to determine the quantities demanded and supplied to determine if a shortage or surplus exists. The quantities demanded and supplied can be determined using the law of demand and supply. If the quantity demanded is greater than the quantity supplied, a shortage exists. If the quantity supplied is greater than the quantity demanded, a surplus exists.
In this case, we do not have enough information to determine the specific quantities demanded and supplied at $120. We would need additional information about the demand and supply functions or curves to make that determination.
Therefore, without additional information, we cannot determine if a shortage or surplus would exist at a price of $120 or how large the shortage or surplus would be.