Consider a market consisting of two farms producing same quality of wheat. The market demand curve and the market supply curve for rice are given by:

q_D = 250 – p

q_S = 150 + p

At price of Rs. 25, by how much will demand be greater than supply?

50

The correct answer is Option 2: 50

qd =250-p = 250 – 25 = 225

qs = 150 + p = 150 + 25 = 175

qd - qs = 225 – 175 = 50

Thus, at Rs. 25, the demand will be greater than supply by 50 units.