When a price floor is above the equilibrium price,
A) quantity demanded will exceed quantity supplied, so there will be a shortage.
B) quantity supplied will exceed quantity demanded, so there will be a surplus.
C) the market will be in equilibrium.
D) This is a trick question because price floors are generally set below the equilibrium price.

Question

Quizplus · Accepted Answer

When a price floor is set above the equilibrium price, it results in a surplus because the quantity supplied exceeds the quantity demanded at that price level.

When a Price Floor Is Above the Equilibrium Price