When a price floor is imposed above the equilibrium price of a commodity,
A) quantity demanded will be greater than quantity supplied for the good.
B) the quantity demanded by consumers will be greater than at the equilibrium price.
C) a shortage of the good will develop.
D) a surplus of the good will develop.

Question

Quizplus · Accepted Answer

A price floor set above the equilibrium price results in a surplus because it leads to a higher price than consumers are willing to pay, reducing quantity demanded while increasing quantity supplied.

When a Price Floor Is Imposed Above the Equilibrium Price