Asked by Carissa Abrams on Jul 18, 2024
Verified
Suppose a price floor for a good is set above the equilibrium price.At this price:
A) quantity supplied will be less than quantity demanded.
B) quantity supplied will exceed quantity demanded.
C) there will be a shortage of the good.
D) more number of consumers will be willing and able to purchase the good.
E) producers will suffer an economic loss.
Price Floor
A government or group-imposed limit that prevents prices of goods or services from falling below a certain level.
Equilibrium Price
The price in the market where the amount of products offered matches the amount of products people want to buy.
Quantity Supplied
The amount of a good or service that producers are willing and able to sell at a particular price over a specified period.
- Acquire knowledge of how surplus situations in markets are caused by price floors.
Verified Answer
JZ
Jenny ZhangJul 18, 2024
Final Answer :
B
Explanation :
When a price floor is set above the equilibrium price, it causes the quantity supplied to exceed the quantity demanded, leading to a surplus of the good.
Learning Objectives
- Acquire knowledge of how surplus situations in markets are caused by price floors.