Figure 6-7

-Refer to Figure 6-7.If the government imposes a binding price floor of $5.00 in this market,what is the result

Question

Figure 6-7
 
-Refer to Figure 6-7.If the government imposes a binding price floor of $5.00 in this market,what is the result

Quizplus · Accepted Answer

At a price floor of $5.00, the quantity demanded is 10 units, and the quantity supplied is 45 units, resulting in a surplus of 35 units. This can be seen by looking at the point where the demand curve intersects with the price floor line, and then looking horizontally to the vertical axis to find the corresponding quantity demanded. Similarly, looking at the point where the supply curve intersects with the price floor line and then looking vertically to the horizontal axis gives us the corresponding quantity supplied.

Figure 6-7 -Refer to Figure 6-7.If the Government Imposes a Binding Price