Asked by edward duong on May 31, 2024
Verified
The current price of blue jeans is $30 per pair, but the equilibrium price of blue jeans is $25 per pair. As a result, which of the following statements is not true?
A) The quantity supplied of blue jeans exceeds the quantity demanded of blue jeans at the $30 price.
B) The equilibrium quantity of blue jeans exceeds the quantity demanded at the $30 price.
C) There is a surplus of blue jeans at the $30 price.
D) There is a shortage of blue jeans at the $30 price.
Equilibrium Price
The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers.
Surplus
A surplus refers to the amount by which the quantity of a good produced or supplied exceeds the quantity demanded, often leading to price reductions.
- Master the theory of market equilibrium in terms of price and quantity.
- Explain the relationship between supply and demand factors and market surpluses or shortages.
Verified Answer
ZK
Zybrea KnightJun 05, 2024
Final Answer :
D
Explanation :
When the price of blue jeans is above the equilibrium price ($30 vs. $25), it leads to a surplus, not a shortage. This means that the quantity supplied exceeds the quantity demanded, contradicting the notion of a shortage.
Learning Objectives
- Master the theory of market equilibrium in terms of price and quantity.
- Explain the relationship between supply and demand factors and market surpluses or shortages.