A price floor set above an equilibrium price tends to cause persistent imbalances in the market because
A) Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage.
B) Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus.
C) Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage.
D) Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.

Question

Quizplus · Accepted Answer

A price floor set above the equilibrium price results in a surplus because the quantity supplied exceeds the quantity demanded. The price cannot fall to eliminate this surplus, leading to persistent imbalances.

A Price Floor Set Above an Equilibrium Price Tends to Cause