Question

Dakota’s dance troupe sold T-shirts as a fundraiser so that they could go to summer camp. When the girls began their fundraiser, 600 people wanted their T-shirts. They were actually short by 210 T-shirts, so the troupe ordered more. They raised the price in hopes of earning more profit, but when the price increased, the demand went down. Use the given information to analyze what happened with the fundraiser.
What happens when the quantity is above the equilibrium point?

Answer 1

The quantity increases because people don’t wanna pay more than the equilibrium price

Answer 2

Answer:

If the quantity is above the equilibrium point, there is an oversupply.

Step-by-step explanation:

The demand and supply curves intersect at a point called the equilibrium point. At this point, the price and quantity of equilibrium are determined. If we increase the price of the products, there is a decrease in the quantity demanded.

If demand and supply are perfectly elastic, when the price increases, the quantity demanded decreases proportionally. Given this, we can deduce that the collection of funds did not vary from what they would have obtained by selling the rest of the t-shirts at the same price.  

If the quantity is above the equilibrium point, there is an oversupply.

Have a nice day!