Question

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. there will be a shortage.
b. demand will stay the same.
c. the demand for the magazine will go up.
d. there will be a surplus.

Answer 1

B. There will be a surplus.

Answer 2

Answer:d) there will be a surplus.

Explanation: At the equilibrium state, the supply of magazine and demand of magazine will be equal.After the increment in the price of magazine, the demand of magazine will be less due to it.

As the supply is still constant with low demand, there will be abundance in the stock of magazine .Thus, there will be a surplus of magazines.

Other option are incorrect because magazine shortage will not occur , demand will decrease and not go up.Thus, the correct option is option(d).