Consider the supply and demand curves illustrated below. Price P₁ 0 B. P2 P3 Q1 Q2 Quantity Which of the following statements is TRUE? a) At a price of P3, there is excess demand equal to the distance DE. b) At a price of P3, there is excess demand equal to the distance BE. c) At a price of P3, there is excess supply equal to the distance BE. d) At a price of P3, there is excess supply equal to the distance DE.
Consider the supply and demand curves illustrated below. Price P₁ 0 B. P2 P3 Q1 Q2 Quantity Which of the following statements is TRUE? a) At a price of P3, there is excess demand equal to the distance DE. b) At a price of P3, there is excess demand equal to the distance BE. c) At a price of P3, there is excess supply equal to the distance BE. d) At a price of P3, there is excess supply equal to the distance DE.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Consider the supply and demand curves illustrated below.
Price
P₁
0
B.
P2
P3
Q1 Q2
Quantity
Which of the following statements is TRUE?
a) At a price of P3, there is excess demand equal to the distance DE.
b) At a price of P3, there is excess demand equal to the distance BE.
c) At a price of P3, there is excess supply equal to the distance BE.
d) At a price of P3, there is excess supply equal to the distance DE.
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