Question: Suppose that the demand equation for socks, Qd, is represented by the following equation: Qd = 100 - 20P, where P represents the market price.

Suppose that the demand equation for socks, Qd, is represented by the following equation: Qd = 100 - 20P, where P represents the market price.

The equation for the supply of socks, Qs, is represented by the equation: Qs = 10P.

Suppose that the price of socks is $3. What is occurring at this price?

  1. Equilibrium
  2. Surplus
  3. Shortage

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