A price floor set above the equilibrium price
A) balances supply and demand.
B) creates a surplus.
C) creates a shortage.
D) has no effect.
E) creates excess demand.

Question

Quizplus · Accepted Answer

A price floor above the equilibrium price creates a surplus because suppliers are willing to supply more quantity than consumers are willing to buy at the higher price. This results in excess supply or a surplus.

A Price Floor Set Above the Equilibrium Price