Post-test Time Limit: 0:15:00 Time Left:0:11:01 Latrease Drake: Attempt 1 trom $

Question

Post-test Time Limit: 0:15:00 Time Left:0:11:01 Latrease Drake: Attempt 1 trom $14 to a higher price. surplus of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. Save Question 4 (10 points) D Figure 4-16 Price 20 18 16 14 10 10 20 30 40 50 60 70 80 90 uaxtity Refer to Figure 4-16. If there is currently a shortage of 20 units of the good, then the law of demand predicts that the price will rise by $2 to eliminate the shortage supply predicts that the price will rise by $2 to eliminate the shortage. supply and demand predicts that the price will rise by $2 to eliminate the shortage. supply and demand predicts that the price will fall by $2 to eliminate the shortage Save

Explanation / Answer

Solution-

The correct option is C. Supply and demand predicts that the price will rise by $2 to eliminate the shortage.

Reason-

When price will rise by $2 then supplied and demanded quantity will also equals when demanded and supplied quantity is equal then there is no surplus and shortage.When supplied and demanded quantity will be equal then there is equlibrium.At equilibrium point supplied and demanded quantity is equal or same.

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