Question

At college X and at college Y, students pay $3,000 less than the equilibrium tuition. If the supply of openings is the same at both colleges, it follows that a shortage of openings will be greater at:____________.
a) college X than college Y.
b) college X than the surplus at college Y.
c) college Y than the surplus at college X.
d) college X than college Y if the demand is greater at college X.
e) ​college X than college Y if the demand is less at college X.

Answer 1

Answer:

Option “D” College X than college Y if the demand is greater at college X.  

Explanation:

Option D is correct because shortage depends on the degree of demand if the supply is the same and prices are below the equilibrium price. If the price paid is below the equilibrium price then it will generate a shortage because at this point demand is greater than supply. Therefore, if college X has greater demand then it will have a greater shortage.