A Level Economics (9708)•9708/13/M/J/19
Explanation
Excess Demand vs. Supply in Fixed Supply Market Steps:
- Locate quantity demanded (QD) from the demand schedule at the given price.
- Subtract quantity supplied (QS) from QD to find excess demand (if positive) or excess supply (if negative, take absolute value).
- Compare the calculated shortage/surplus to the 10 avocados claimed in each option.
- Select the option where the difference exactly matches excess demand or supply of 10.
Why A is correct:
- At $2.40, QD is 460; with QS=450, excess demand = 460 - 450 = 10, matching the definition of excess demand as QD exceeding QS.
Why the others are wrong:
- B: At $2.00, QD=500; 500 - 450 = 50 excess demand, not supply of 10.
- C: At $1.00, QD=920; 920 - 810 = 110 excess demand, not supply of 10.
- D: At $2.00, QD=500; 810 - 500 = 310 excess supply, not 10.
Final answer: A
Topic: The interaction of demand and supply
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