Macroeconomics 11th Edition by Stephen Slavin

Exercise 58

Before you get started, you'll find it's much easier to answer many of these questions by first sketching a graph of a supply and demand curve. In fact, that graph will help you answer the first four questions.
Circle the letter that corresponds to the best answer.
Which statement is true?
a) A price floor is above equilibrium price and causes surpluses.
b) A price floor is above equilibrium price and causes shortages.
c) A price floor is below equilibrium price and causes surpluses.
d) A price floor is below equilibrium price and causes shortages.