The market for blankets is shown here.

Which of the following explains why $\$ 7$ is not an equilibrium price in the market for blankets?

Choose 1 answer:
(A) The supply is greater than the demand
(B) The demand is greater than the supply
(C) The quantity supplied is greater than the quantity demanded
(D) The quantity demanded is greater than the quantity supplied
(E) The quantity demanded and quantity supplied are equal
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Question

The market for blankets is shown here.

Which of the following explains why $\$ 7$ is not an equilibrium price in the market for blankets?

Choose 1 answer:
(A) The supply is greater than the demand
(B) The demand is greater than the supply
(C) The quantity supplied is greater than the quantity demanded
(D) The quantity demanded is greater than the quantity supplied
(E) The quantity demanded and quantity supplied are equal
Report a problem

Accepted Answer

∻Solution∻ ‖ a ⋮ Equilibrium Price: The equilibrium price is where the quantity supplied equals the quantity demanded. In the graph, this occurs at the intersection point (6,8). ‖ ‖ b ⋮ Price Analysis: At $7, the quantity supplied (3) is less than the quantity demanded (6). This indicates that $7 is not the equilibrium price. ‖ ‖ c ⋮ Conclusion: Since the quantity demanded is greater than the quantity supplied at $7, it cannot be the equilibrium price. ‖ ∻Answer∻ ⚹ (D) The quantity demanded is greater than the quantity supplied ⚹ ∻Key Concept∻ ⚹ Equilibrium Price ⚹ ∻Explanation∻ ⚹ The equilibrium price is the price at which the quantity supplied equals the quantity demanded. At $7, the quantity demanded (6) is greater than the quantity supplied (3), indicating that $7 is not the equilibrium price. ⚹◊What effect would an equilibrium price have on the market for blankets in terms of efficiency and allocation of resources?⍭ Generate me a similar question◊

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