Question

If the supply and demand curves cross at a price of $2, at any price about that there will be a

a. an equilibriumb. a surplusc. a shortagec a crisis

Answer 1

B

Step-by-step explanation:

There will be a surplus because the quantity supplied will be higher than quantity demanded. When the price is above the equilibrium price, which is the price at which the two curves cross each other in this case $ 2, the supplier is willing to supply more since he will make more money at higher price while the consumers look for a way to buy less leading to excess supply. After a while, the supplier will be force to reduce price instead of holding the goods to attract consumers again.

Answer 2

a surplus

Step-by-step explanation:

Let’s contemplate one situation within which the quantity that producers wish to sell doesn’t match the quantity that buyers wish to shop for. Suppose that a market produces quite the amount demanded. Let’s use our example of the value of a gallon of gas. Imagine that the value of a gallon of gas were $2 per gallon.

At this value, the amount demanded is one hundred gallons, and also the amount of gas equipped is two hundred gallons. Now, compare amount demanded and amount equipped at this value. amount equipped (200) is bigger than amount demanded (100). Or, to place it in words, the quantity that producers wish to sell is bigger than the quantity that buyers wish to shop for. we tend to decision this a scenario of excess offer (since Qs > Qd) or a surplus