Question

A. In the latte market, demand often exceeds supply and supply sometimes exceeds demand.B. The price of a latte rises and falls in response to changes in supply and demand.In which of these two statements are the concepts of supply and demand used correctly?A)Statement A because demand and supply intersect; they do not exceed each other.B)Statement B because demand and supply intersect; they do not exceed each other.C)Statement A because a new intersection of the two curves will lead to changes in the equilibrium quantity and price of lattes.D)Statement B because a new intersection of the two curves will not lead to changes in the equilibrium quantity and price of lattes.

Answer 1

Option B.

Statement B because demand and supply intersect; they do not exceed each other

Step-by-step explanation:

This is because in statement A equilibrium is not attained as demand exceeds supply and supply may also exceed demand. In statement B, changes in supply and demand is causing changes in prices. Thus , new equilibrium will be attained and prices adjusting to attain equilibrium and remove excess demand or excess supply.