Question

According to the table above, if the government sets an effective price floor of $100,
a. the market will be in equilibrium.
b. the supply will increase to create equilibrium.
c. the demand will increase to create equilibrium.
d. the quantity demanded will increase to create equilibrium.
e. the quantity supplied will be 750.

Answer 1

Actually from the given table, we can see that at a floor price of $100, the corresponding quantity demanded is 250 while the quantity supplied is 750. So we can say that there is actually no equilibrium since quantity demanded =/= quantity supplied.

 

Therefore the only correct answer is:

e. the quantity supplied will be 750.