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The figure at right shows a graph of the market for pizzas in a large town. At a price of​ $5, there will be

Part 2

A.

excess supply.

B.

excess demand.

C.

equilibrium.

D.

zero demand.

The graph provided shows a typical supply and demand model for pizzas in a large town. Here's what each line represents:

- **S (Supply Curve)**: Shows the relationship between price and the quantity of pizzas that suppliers are willing to sell. As the price increases, the quantity supplied increases.
- **D (Demand Curve)**: Shows the relationship between price and the quantity of pizzas that consumers are willing to buy. As the price decreases, the quantity demanded increases.

### At a price of $5:
- **Examine the graph**: 
    - At $5, the quantity demanded is about 80 units, but the quantity supplied is around 40 units.
    - This gap between quantity demanded and quantity supplied creates an **excess demand** situation.
  
### Therefore, the correct answer is:
**B. Excess demand.**

This occurs because the price of $5 is below the equilibrium price, where the quantity demanded exceeds the quantity supplied, creating a shortage.

Would you like further details or have any questions?

Here are 5 related questions for deeper understanding:
1. What happens to the market if there is excess demand in the long run?
2. How is equilibrium price determined in a supply and demand graph?
3. What factors could shift the demand curve in this market?
4. What factors could cause the supply curve to shift?
5. How does excess supply differ from excess demand?

**Tip:** In a typical market, excess demand leads to price increases as suppliers respond to shortages by raising prices.

The figure at right shows a graph of the market for pizzas in a large town. At a price of​ $5, there will be:

This page explains the concept of supply and demand using the example of a pizza market graph. At a price of $5, we see excess demand, as the quantity demanded exceeds the quantity supplied, leading to a shortage. Learn more about how market equilibrium adjusts in such situations.

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