Practice prompt · Q:economics-and-market-foundations/compute-surplus-001

Compute excess supply without changing its units

Compute a price specific market surplus and reject profit, cash, welfare, and automatic inventory interpretations.

Updated Aug 7, 2026 Review due Nov 7, 2026

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Under Linden's baseline demand and supply functions, how should the market be described at $70 per chair?

Choose the best answer. a A 200-chair-per-week market surplus because quantity supplied is 900 and quantity demanded is 700 at $70; no profit, cash, welfare area, or inventory balance is computed. b $200 of profit because every economic surplus is an accounting income amount. c 200 chairs of ending inventory because every offered but unpurchased unit must have been produced and retained.

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Answer: a

Choice a. At $70, Qs = 900 and Qd = 700, so excess supply is 200 qualifying chairs per week under the model.