The above table gives the demand and supply schedules for cat food. If the price is $3.00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price?
If there is a shortage, how much is the shortage? If there is a surplus, how much is the surplus? If $3.00 is the equilibrium price, what is the equilibrium quantity?
At a price of $3.00 per pound of cat food, there is a surplus. The surplus equals 44 tons (the quantity supplied) minus 35 tons (the quantity demanded), or 9 tons of cat food.
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When a society achieves production efficiency, it is
A) definitely producing at a point on its PPF. B) perhaps producing at a point on its PPF and perhaps producing at a point inside its PPF. C) definitely producing that combination of goods and services that society values most highly. D) not fully employing all of its available resources to produce goods and services. E) enjoying a free lunch.
The "vicious circle of poverty" for developing nations can best be described by:
A. Low levels of international trade that reduce exports and increase the dependence on imports B. Low incomes that inhibit saving and the accumulation of real and human capital, making it difficult to increase productivity and income C. A large government sector which reduces the availability of private investment spending but which increases macroeconomic stability D. A lack of entrepreneurial talent that limits the formation of businesses and the development of private businesses