If the government imposes a binding price floor on sugar, it may also have to

Question

Quizplus · Accepted Answer

When a government imposes a binding price floor on a good, it sets a minimum legal price above the equilibrium price. This means that the quantity supplied will exceed the quantity demanded, resulting in a surplus. In the case of sugar, if the government does not want the surplus sugar to go to waste, it may have to purchase it from the producers. Therefore, the correct choice is D.

If the Government Imposes a Binding Price Floor on Sugar