If the equilibrium price of an hour with a personal trainer is $45 and the market price is currently $55, then there is:
A. a surplus of personal trainers.
B. a shortage of personal trainers.
C. equilibrium
D. none of the above
I think it's A?
I agree. It must be A.
thanks :-)
To determine the correct answer, we need to understand the concept of equilibrium price and how it affects the market.
Equilibrium price is the price at which the quantity demanded equals the quantity supplied in a market. In other words, it is the point where there is no shortage or surplus.
In this case, the equilibrium price of an hour with a personal trainer is given as $45. However, the current market price is $55, which means the market price is above the equilibrium price.
When the market price is above the equilibrium price, it indicates that the quantity supplied exceeds the quantity demanded, resulting in a surplus. Therefore, the correct answer is A. There is a surplus of personal trainers.