Refer to the accompanying figure.If the government has a budget of $300,000 to purchase surplus shampoo,what is the maximum possible floor price that could be imposed?

Question

Quizplus · Accepted Answer

The maximum floor price would be at the point where the supply curve intersects with the horizontal line representing the budget of $300,000. This occurs at a price of $3, as shown in the graph. Any higher price would result in a surplus of funds or a lower quantity of shampoo purchased. Therefore, the best choice is C, with a maximum floor price of $3.

Refer to the Accompanying Figure