Given the following supply and demand curves for coupon books, a price of $12.00 would produce:
Demand Q = 55,000 - 4000P
Supply Q = 5000 + 1000P
A) equilibrium.
B) a shortage of 10,000 coupon books.
C) a surplus of 10,000 coupon books.
D) a shortage of 17,200 coupon books.
E) a surplus of 17,200 coupon books.

Question

Quizplus · Accepted Answer

To determine the market condition at a price of $12.00, we substitute P = 12 into both the demand and supply equations:Demand Q = 55,000 - 4000(12) = 55,000 - 48,000 = 7,000Supply Q = 5000 + 1000(12) = 5000 + 12,000 = 17,000Supply exceeds demand by 10,000 coupon books (17,000 - 7,000), indicating a surplus of 10,000 coupon books.

Given the Following Supply and Demand Curves for Coupon Books