Multiple Choice
The figure given below shows the demand curves [D1 and D2] and the supply curve [S1] of capital. Figure 30.1 ![The figure given below shows the demand curves [D<sub>1 </sub>and D<sub>2</sub>] and the supply curve [S<sub>1</sub>] of capital. Figure 30.1 In Figure 30.1, if the price set in the market is P<sub>3 </sub>when the demand curve is D<sub>1</sub>, then: A) the market will be in equilibrium. B) there will be an excess demand for capital of the amount Q<sub>4</sub> - Q<sub>1</sub>. C) there will be a shortage of capital in the market by the amount Q<sub>4</sub> - Q<sub>2</sub>. D) there will be a surplus of capital in the market by the amount Q<sub>3</sub> - Q<sub>1</sub>. E) there will be a surplus of capital in the market by the amount Q<sub>3</sub> - Q<sub>2</sub>.](https://d2lvgg3v3hfg70.cloudfront.net/TB2060/11eaaa2d_b618_7e04_9b29_e1a2b64b44c1_TB2060_00.jpg)
In Figure 30.1, if the price set in the market is P3 when the demand curve is D1, then:
A) the market will be in equilibrium.
B) there will be an excess demand for capital of the amount Q4 - Q1.
C) there will be a shortage of capital in the market by the amount Q4 - Q2.
D) there will be a surplus of capital in the market by the amount Q3 - Q1.
E) there will be a surplus of capital in the market by the amount Q3 - Q2.
Correct Answer:
Verified
Correct Answer:
Verified
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