O-Level Economics Premium Practice: Demand, Supply and Market Equilibrium | Exercise 2 of 2

Demand, Supply and Market Equilibrium - Exercise 2

Question 1 of 50

Time left: 00:00

Charles sells honey at a weekly farmers' market in Ohio, United States. The table below shows the market demand and supply schedules for one-pound jars of honey, with prices in dollars per jar.

Price (dollars per jar)	Quantity demanded (jars per week)	Quantity supplied (jars per week)
2	90	30
3	85	40
4	80	50
5	75	60
6	70	70
7	65	80
8	60	90

When the price is $7, which statement correctly describes the market and its adjustment process?

Select one option.

A shortage of 15 jars exists, so the price will fall towards $6.
A surplus of 25 jars exists, so the price will rise towards $8.
A surplus of 15 jars exists, so sellers will cut the price, which raises quantity demanded and lowers quantity supplied until the price reaches $6.
A shortage of 15 jars exists, so sellers will raise the price towards $8.
The market is in equilibrium at $7 because quantity demanded and quantity supplied are both 70 jars.

You have used 0 of 1 attempt

Next ▶