**The market for burritos in a college town is shown to the right. At a price of $7, how much excess demand is there?****Answer Options:**- A. 0; there is excess supply at $7.- B. 20 units- C. 30 units- D. 10 units**Graph Explanation:**The graph displays the supply and demand curves for burritos in a college town. - The blue line (denoted as D) represents the demand curve.- The red line (denoted as S) represents the supply curve.The x-axis shows the Quantity of burritos, ranging from 0 to 160 units. The y-axis shows the Price of burritos in dollars, ranging from $0 to $16.Key points on the graph:- A dotted vertical line at 40 units intersects the demand curve at $10 and the supply curve just slightly above $5.- A dotted vertical line at 60 units intersects both the demand and supply curves at approximately $7 and $8 respectively.- At $7 on the price axis, the quantity demanded is about 60 units while the quantity supplied is about 40 units.This shows an excess demand of (60 units - 40 units) = 20 units at the price of $7.The correct answer is:- B. 20 units

The equilibrium occurs where the demand and supply curve intersect each other. The price below the…

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The market for burritos in a college town is shown to the right. At price of $7, how much excess demand is there? A. 0; there is excess supply at $7. B. 20 units O C. 30 units OD. 10 units

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

**The market for burritos in a college town is shown to the right. At a price of $7, how much excess demand is there?**

**Answer Options:**
- A. 0; there is excess supply at $7.
- B. 20 units
- C. 30 units
- D. 10 units

**Graph Explanation:**

The graph displays the supply and demand curves for burritos in a college town.

- The blue line (denoted as D) represents the demand curve.
- The red line (denoted as S) represents the supply curve.

The x-axis shows the Quantity of burritos, ranging from 0 to 160 units. The y-axis shows the Price of burritos in dollars, ranging from $0 to $16.

Key points on the graph:
- A dotted vertical line at 40 units intersects the demand curve at $10 and the supply curve just slightly above $5.
- A dotted vertical line at 60 units intersects both the demand and supply curves at approximately $7 and $8 respectively.
- At $7 on the price axis, the quantity demanded is about 60 units while the quantity supplied is about 40 units.

This shows an excess demand of (60 units - 40 units) = 20 units at the price of $7.

The correct answer is:
- B. 20 units

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