AP Microeconomics · Past multiple choice · Question 3 · Four-function calculator
Oranges priced under equilibrium
The price of oranges sits below the level where the market clears. Choose the statement that describes the market at that price.
The lesson this question tests
1 Read the question
The question is College Board's: sample question 3 in AP Microeconomics Course and Exam Description, Effective Fall 2026. It starts on page 134 of the PDF. A four-function calculator is allowed, as on the exam.
Open Question 3 (PDF, page 134)
2 Pick your answer
3 Check the explanation
Why the answer is E open once you have picked
Picture a supply and demand graph and draw a horizontal line below the equilibrium price. At that lower price buyers want more, so you slide down the demand curve to a larger quantity demanded. Sellers want to offer less, so you slide down the supply curve to a smaller quantity supplied. The gap between the two is a shortage: quantity demanded exceeds quantity supplied.
In a shortage the amount actually traded is limited by the short side of the market, which here is the sellers. So the quantity sold equals the quantity supplied, and buyers who wanted more go without.
Each choice
- A. A surplus happens when price is above equilibrium. Below equilibrium the problem is the opposite: buyers want more than sellers offer.
- B. This describes a price above equilibrium. A student who mixes up "above" and "below" on the graph lands here.
- C. In a shortage, sellers sell everything they bring to market, so quantity supplied and quantity sold are the same. Unsold output is a surplus idea.
- D. Every unit sold is a unit someone bought, so purchases and sales are always equal. This confuses wanting to buy (quantity demanded) with actually buying.
- E (correct). A price below equilibrium means a shortage; a price above it means a surplus.
Question and answer key: College Board. The title and summary are ours, and so is the explanation.