Question

Suppose the current price of a good is $167. At this price, the quantity supplied is 170 units, and the quantity demanded is 120 units. For every $1 decrease in price, the quantity supplied decreases by 10 units and the quantity demanded increases by 15 units. At the current price, the quantity demanded is than the quantity supplied. This means that the market is currently experiencing a . In order to adjust, the market price will until the quantity demanded and quantity supplied are equal. The result is an equilibrium quantity of and an equilibrium price of $ .

Answer 1

is less than

surplus

fall

$165

150

Step-by-step explanation:

Wjen demand exceeds supply, there is surplus

This is because price is greater than equilibrium price. Price would fall until equilibrium is restored