On a supply-and-demand diagram,consider a price for which the horizontal distance to the supply curve exceeds the horizontal distance to the demand curve.There is a __________ at that price and the current price must be __________ the equilibrium price.
A) shortage; above
B) shortage; below
C) surplus; above
D) surplus; below

Question

Quizplus · Accepted Answer

When the horizontal distance to the supply curve exceeds the horizontal distance to the demand curve, it means that at that price, quantity supplied is greater than quantity demanded, indicating a surplus. Since there is more supply than demand, the current price must be above the equilibrium price, where supply equals demand.

On a Supply-And-Demand Diagram,consider a Price for Which the Horizontal