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March 25, 2017

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Suppose the market for the magazine is in equilibrium. Some students insist on raising the cover price by $1 and printing the same quantity. What is likely to happen?

A. The demand for the magazine will go up.

B. There will be a shortage of 150 magazines.

C. There will be a surplus of 100 magazines.

  • Economics - ,

    Look at a typical demand curve. As price goes up, demand goes down. You will not sell as many magazines at the higher price, probably.

  • Economics - ,

    B?

  • Economics - ,

    Huh???

    Don't you understand Damon's explanation?

  • Economics - ,

    C

  • Economics - ,

    That's right, Krystal/Anonymous.

  • Economics - ,

    so the demand for magazine will not go up because the price is too high.

  • Economics - ,

    Right.

  • Economics - ,

    so there for there will be a surplus of 100 magazines?

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