Price floors always result in
A) a loss of total economic surplus.
B) a shortage.
C) too much consumption.
D) too little production.
E) the quantity demanded exceeding the quantity supplied.

Question

Quizplus · Accepted Answer

Price floors set a minimum price above the equilibrium price, causing the quantity supplied to exceed the quantity demanded, resulting in a surplus. This surplus creates inefficiency and a loss of total economic surplus, as some producers are forced to sell at the higher price, while consumers are deterred from purchasing the good or service.

Price Floors Always Result in