the diagram to the right represents the market for canvas tote bags. assume that the price of tote bags is…

the diagram to the right represents the market for canvas tote bags. assume that the price of tote bags is $15. at this price.\na. the quantity demanded exceeds the quantity supplied of tote bags by 75. the price will eventually rise to $25 where quantity demanded will equal quantity supplied.\nb. the supply exceeds the demand of tote bags by 55. some consumers will have an incentive to offer to buy tote bags at a higher price.\nc. there is a shortage, equal to 55 tote bags, that will be eliminated when the price rises to $25.\nd. there is a shortage, equal to 55 tote bags, the price of tote bags will fall.

the diagram to the right represents the market for canvas tote bags. assume that the price of tote bags is $15. at this price.\na. the quantity demanded exceeds the quantity supplied of tote bags by 75. the price will eventually rise to $25 where quantity demanded will equal quantity supplied.\nb. the supply exceeds the demand of tote bags by 55. some consumers will have an incentive to offer to buy tote bags at a higher price.\nc. there is a shortage, equal to 55 tote bags, that will be eliminated when the price rises to $25.\nd. there is a shortage, equal to 55 tote bags, the price of tote bags will fall.

Answer

Brief Explanations:

At a price of $15, on a typical supply - demand graph, quantity demanded exceeds quantity supplied. This creates a shortage. The shortage is the difference between quantity demanded and quantity supplied at that price. In a market, when there is a shortage, price tends to rise until equilibrium (where quantity demanded equals quantity supplied) is reached. Here, equilibrium is at $25.

Answer:

C. there is a shortage, equal to 55 tote bags, that will be eliminated when the price rises to $25.