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Economics (AS & A Level) · Oct / Nov 2023 · Paper 12 · Question 12

9708The interaction of demand and supply

The equation for the quantity demanded, QD, for a product is QD = 400 – 20P where P = price in $. The quantity supplied, QS, is given by QS = 100 + 40P. Which change will occur if the price rises from $5 to $6?

  1. AThe market will move from equilibrium to shortage.
  2. BThe market will move from equilibrium to surplus.
  3. CThe market will move from shortage to surplus.
  4. DThe market will move from surplus to shortage.

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Correct answer: B. The market will move from equilibrium to surplus.

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