Assume that the price for a pair of shoes has been set at $40. The demand for a pair of shoes is given by and the supply for the same pair of shoes is . In both cases p is price per pair and q is the quantity produced or sold. Compare the quantity demanded and the quantity supplied. Will there be a surplus or shortfall at this price?
A)There will be a shortfall.
B)There will be a surplus.

Question

Assume that the price for a pair of shoes has been set at $40. The demand for a pair of shoes is given by  and the supply for the same pair of shoes is  . In both cases p is price per pair and q is the quantity produced or sold. Compare the quantity demanded and the quantity supplied. Will there be a surplus or shortfall at this price? ​
A)There will be a shortfall. 
B)There will be a surplus.

Quizplus · Accepted Answer

Demand: qd = 120 - 2p
Supply: qs = 20 + 3p
At a price of $40 per pair of shoes, the quantity demanded is qd = 120 - 2(40) = 40 pairs of shoes.
At the same price, the quantity supplied is qs = 20 + 3(40) = 140 pairs of shoes.
Since the quantity supplied exceeds the quantity demanded, there will be a surplus of 140 - 40 = 100 pairs of shoes. Therefore, there will be a surplus at this price.

Assume That the Price for a Pair of Shoes Has