Question

20) Use the information in the table below to answer the following questions: Price per Gardenburger $6 Quantity Supplied (Gardenburgers per Month Table 1 Quantity Demanded (Gardenburgers per Month) 1,100 1,000 900 800 700 700 750 800 850 Jf the price of a product is $6, there is an excess demand of A) 400 B) 150 C) 450 D) 300

Answer 1

More quantity is demanded at a lower price and high wuantiy is supplied at a higher price. So at any given price other than the equirlibrium price, there will be a difference between the quantity supplied and demanded. If demand is greater then the difference is called surplus and if the demand is smaller then the difference is called the shortage. Below table shows the calculation of the same at each price level:

Price	Quantity Demanded	Quantity Supplied	Difference	Nature
6	1100	650	1100-650 = 450	Surplus or Excess Demand
8	1000	700	1000-700 = 300	Surplus or Excess Demand
10	900	750	900-750 = 150	Surplus or Excess Demand
12	800	800	800-800 = 0	Equilibrium
14	700	850	700-850 = -150	Shortage or Excess Supply

So the excess demand at a price of 6 = 450 units and the correct option is C