Asksia AI LOGO

Sia

Question
Microeconomics
Posted 2 months ago

The demand and supply schedules for lawn mowing are given below:
\begin{tabular}{lll} 
Price & Quantity demanded & Quantity Supplied \\
\hline$20\$ 20 & 0 & 12 \\
$18\$ 18 & 2 & 10 \\
$16\$ 16 & 2 & 8 \\
$14\$ 14 & 3 & 6 \\
$12\$ 12 & 4 & 4 \\
$10\$ 10 & 5 & 2 \\
$8\$ 8 & 6 & 0 \\
\hline
\end{tabular}

Which of the following would cause a surplus in this market?

Choose 1 answer:
(A) Any price below $12\$ 12
(B) A price of $12\$ 12
(c) Any price above $12\$ 12
(D) Any price below $20\$ 20
(E) If the good was free
Sign in to unlock the answer
Answer from Sia
Posted 2 months ago
Sure, let's analyze the given data and determine which option would cause a surplus in the market for lawn mowing services.
Solution
a
Definition of Surplus: A surplus occurs when the quantity supplied exceeds the quantity demanded at a given price
b
Analysis of Data: From the table, we can see the following: - At 20,quantitydemanded=0,quantitysupplied=12−At20, quantity demanded = 0, quantity supplied = 12 - At 18, quantity demanded = 2, quantity supplied = 10 - At 16,quantitydemanded=2,quantitysupplied=8−At16, quantity demanded = 2, quantity supplied = 8 - At 14, quantity demanded = 3, quantity supplied = 6 - At 12,quantitydemanded=4,quantitysupplied=4−At12, quantity demanded = 4, quantity supplied = 4 - At 10, quantity demanded = 5, quantity supplied = 2 - At $8, quantity demanded = 6, quantity supplied = 0
c
Surplus Condition: A surplus occurs when the price is set above the equilibrium price, where quantity supplied is greater than quantity demanded. From the table, the equilibrium price is 12,wherequantitydemandedequalsquantitysupplied(4units).Anypriceabove12, where quantity demanded equals quantity supplied (4 units). Any price above 12 will result in a surplus
Answer
(C) Any price above $12
Key Concept
Surplus occurs when the quantity supplied exceeds the quantity demanded at a given price.
Explanation
In this market, any price above $12 will cause a surplus because the quantity supplied will be greater than the quantity demanded.

Not the question you are looking for? Ask here!

Enter question by text

Enter question by image

Upgrade to Asksia Pro

Join a AskSia's Pro Plan, and get 24/7 AI tutoring for your reviews, assignments, quizzes and exam preps.

Unlimited chat query usages
Strong algorithms that better know you
Early access to new release features
Study Other Question