POSSIBLE POINTS: 4 A local grocery stores orders 200 cases of Pepsi each week and sells them at a price of 6.00 per case. At the end of the first week, they had only sold 160 cases. What economic situation is the grocery store facing and what will have to happen to price in order for equilibrium to be attained? Shortage and price will need to fall Shortage and price will need to rise Surplus and price will need to fall Surplus and price will need to rise

Question

POSSIBLE POINTS: 4 A local grocery stores orders 200 cases of Pepsi each week and sells them at a price of 6.00 per case. At the end of the first week, they had only sold 160 cases. What economic situation is the grocery store facing and what will have to happen to price in order for equilibrium to be attained? Shortage and price will need to fall Shortage and price will need to rise Surplus and price will need to fall Surplus and price will need to rise

Answer 1

To determine the economic situation the grocery store is facing, we need to compare the quantity demanded with the quantity supplied.Quantity supplied: 200 casesQuantity demanded: 160 casesSince the quantity demanded (160 cases) is less than the quantity supplied (200 cases), there is a surplus of Pepsi cases.To attain equilibrium, where the quantity demanded equals the quantity supplied, the price needs to fall. This will increase the quantity demanded and decrease the quantity supplied until they are equal.Therefore, the correct answer is: Surplus and price will need to fall.

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