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For a particular industry, Supply Efficiency is measured in terms of the actual supply of a product as a percentage of its demand. Similarly, the Market Potential measures the demand for a product compared in percentage terms to the production capacity for that product. The graph below shows the Supply Efficiency and Market Potential for a product in this industry. 
 
 
 
Q. Which of these years shows the highest increase in the difference between  the Production Capacity and Supply over the previous year, if the Demand  for the product is 80000 tons for each year?
  • a)
    2015
  • b)
    2013
  • c)
    2014
  • d)
    Cannot be determined
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
For a particular industry, Supply Efficiency is measured in terms of t...
Solution: 2012: Supply = 65% of Demand = 0.65 x 80000 = 52000. Demand = 80% of Production i.e. Production = 80000/0.8 = 100000. Difference between Production and Supply = 100000 - 52000 = 48000 tons
2013: Supply = 70% of Demand = 0.7 x 80000 = 56000. Demand = 90% of Production i.e. Production = 80000/0.9 = 88888.88. Difference between Production and Supply = 88888.88 - 56000 = 32888.88 tons 2014: Supply = 60% of Demand = 0.6 x 80000 = 48000. Demand = 80% of Production i.e. Production = 80000/0.8 = 100000. Difference between Production and Supply = 100000 - 48000 = 52000 2015: Supply = 80% of Demand = 0.8 x 80000 = 64000 
Demand = 65% of Production i.e. Production = 80000/0.65 = 123076.92 Difference between Production and Supply = 123076.92 - 64000 = 59076.92 tons
2013 can be ignored as the difference decreases rather than increases. Increase in 2014 = 52000 - 32888.88 = 19111.12 tons Increase in 2015 = 59076.92 - 52000 = 7076.92 tons Thus, the highest increase is in 2014.
Hence, option 3.
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For a particular industry, Supply Efficiency is measured in terms of the actual supply of a product as a percentage of its demand. Similarly, the Market Potential measures the demand for a product compared in percentage terms to the production capacity for that product. The graph below shows the Supply Efficiency and Market Potential for a product in this industry.Q. Which of these years shows the highest increase in the difference between the Production Capacity and Supply over the previous year, if the Demand for the product is 80000 tons for each year?a)2015b)2013c)2014d)Cannot be determinedCorrect answer is option 'C'. Can you explain this answer?
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