Question 2 1 pts In the example Surplus (a.k.a. excess supply): when quantity supplied is greater than quantity demanded P Example: $6.00 D Surplus S If P = $5, $5.00 ------ . ----------- . then $4.00 0\" = 9 lattes $3.00 ands $2.00 Q 25lattes resulting in a $1.00 $0.00 ' 0 5101520253035 surplus of 16 lattes Q 40 O The surplus will remain, since there isn't the demand 0 The surplus will increase, since demand is decreasing O The surplus will be eliminated if prices will decrease to $3.00. 0 The surplus will always be there since businesses are greedy and over produce. Question 3 1 pts Shortage (a.k.a. excess demand): when quantity demanded is greater than quantity supplied P . $6.00 W D 5 Example. If P = $1, $500 __ then In the example, 54-00 \" Q\" = 21 lattes $3.00 and Q3 = 5lattes $2.00 _ _ resulting In a 31-00 "" t, """""" 1 shortage of 16 lattes $0.00 Shortage O 5101520253035 Q 0 People want 21 lattes, but only 10 are produced 0 companies will increase their prices to $3.00 to sell their lattes at a prot 0 Companies have no clue what they are doing, they should have produced more 0 If there is a shortage of lattes there must be a shortage of carmel macchiattos Question 6 1 pts In the example, EXAMPLE 2: A Shift in Supply EVENT: New technology reduces cost of P producing hybrid cars. STEP 1: S curve shifts STEP 2: S shifts right STEP 3: The shift causes price to fall and quantity to rise. 5 | 0 change in ownership 0 change in quantity supplied and quantity demanded 0 change in demand and change in supply 0 change is supply and change in quantity demanded