Question

fill in the last column of the table, which represents the state of the market (whether there is a surplus, shortage or equilibrium) (example is given for point a.)

if there is a shortage of x units, write shortage of x. for example, if there is a shortage of 30, write shortage of 30
if there is a surplus of x units, write surplus of x. for example, if there is a surplus of 30, write surplus of 30
if the economy is in equilibrium, simply write equilibrium

Explanation:

Step1: Define market state rules

• If Quantity Supplied > Quantity Demanded: Surplus = Quantity Supplied - Quantity Demanded
• If Quantity Supplied < Quantity Demanded: Shortage = Quantity Demanded - Quantity Supplied
• If Quantity Supplied = Quantity Demanded: Equilibrium

Step2: Calculate for Point A

Surplus = $60 - 20 = 40$

Step3: Calculate for Point B

Surplus = $50 - 30 = 20$

Step4: Check Point C equality

$40 = 40$, so equilibrium

Step5: Calculate for Point D

Shortage = $50 - 30 = 20$

Step6: Calculate for Point E

Shortage = $60 - 20 = 40$

Step7: Calculate for Point F

Shortage = $70 - 10 = 60$

Answer:

Point	State of the Market
B	surplus of 20
C	equilibrium
D	shortage of 20
E	shortage of 40
F	shortage of 60