-Refer to the diagram above.Assume that a price floor is imposed at point V,i.e. ,the price is now represented by the distance 0V,and that the government vows to purchase any excess supply.The distance ______ measures the extent of the resulting __________.
A) QbQc;surplus
B) VR;surplus
C) TR;shortage
D) MN;shortage
E) ZW;loss of total economic surplus

Question

-Refer to the diagram above.Assume that a price floor is imposed at point V,i.e. ,the price is now represented by the distance 0V,and that the government vows to purchase any excess supply.The distance ______ measures the extent of the resulting __________.
A) QbQc;surplus 
B) VR;surplus 
C) TR;shortage 
D) MN;shortage 
E) ZW;loss of total economic surplus

Quizplus · Accepted Answer

The distance QbQc measures the extent of the surplus created by the price floor, as it represents the quantity of excess supply that the government would need to purchase.

-Refer to the Diagram Above